v  LrlEfRA.RY 

OF   THE 

UNIVERSITY  OF  CALIFORNIA. 


CrI  KT    OK 


Received 

Accession  No. 


,  189 


.    Class  No. 


1337 


SILVER  IN  EUROPE 


BY 


S.  DANA  HOBTON 


SECOND    EDITION,    ENLARGED. 


Neto  Dark 
MAC  MILL  AN    AND    CO 

1892 


COPYRIGHT,  1890, 

BY 

S.  DANA  HORTON. 


PREFACE  TO  SECOND  EDITION. 


The  new  matter  here  added  refers  primarily  to  nota- 
ble events  that  have  occurred  since  the  date  of  the 
first  edition  (April,  1890),  but  at  the  same  time  it  has 
its  bearing  upon  the  general  direction  of  the  Silver 
Movement  since  the  last  International  Conference  in 
Paris,  1881-1882.  ME.  GOSCHEN'S  PEOPOSALS  of  De- 
cember 2,  1891,  are  the  first  actual  step  forward  in 
Europe  made  in  this  behalf  since  1881,  but,  as  will  be 
fully  explained  in  an  introductory  paper  on  PEOGEESS 
IN  ENGLAND  (page  291),  this  step  of  a  Tory  Government 
in  1891  is  a  pendant  to  the  action  taken  by  the  Liberal 
Government  in  1881. 

The  general  argument  leading  up  to  it  appears  to 
be  in  fair  measure  set  forth  in  a  tract  distributed 
early  last  year  by  the  Parliamentary  leaders  of  the 
Silver  Party  to  their  colleagues,  the  larger  part  of 
which  is  here  reprinted.  As  a  statement  of  the  whole 
case  for  Great  Britain,  this  paper  is  deficient  in  taking 
for  granted,  or  passing  by  in  silence,  the  great  special 
interests  involved  in  silver ;  namely,  the  agricultural 
interest,  and  the  interest  of  trade  with  silver  countries, 
together  with  manufacturing  for  that  trade.  Of  these 
two  "silver  interests,"  which  may  be  classed  under  the 

iii 


I\T  SILVER    IN    EUKOPE. 

titles  Wheat  and  Cotton,  the  former  is  no  longer  a 
stranger  in  this  country— though  both  were  so  when  I 
raised  the  point  about  them  at  the  Atlanta  Commer- 
cial Convention  in  May,  1885.  The  interests  of  Lan- 
cashire industries,  and  of  the  cotton  trade  generally, 
are  indicated  in  the  extracts  which  follow  on  page 
319,  under  the  title  SILVER  IN  THE  ENGLISH  ELECTIONS. 

Had  time  permitted,  I  should  have  been  glad  to 
remodel  the  book,  changing  its  form  and  giving  it  at 
least  the  consecutiveness  lacking  to  a  collection  of 
distinct  essays. 

But  the  reader  will  pardon  when  he  observes  that 
most  of  my  papers  herein  reprinted  were  like  briefs 
with  which  (to  use  the  terms  of  my  profession)  I  had 
been  '  fighting  a  case '  in  Europe,  and  he  will  pardon 
all  the  more  readily  when  he  realizes  that  the  '  fighting 
of  that  case '  is  really  the  thing  that  Americans  are 
chiefly  interested  in,  whether  they  are  as  yet  aware  of 
it  or  no.  He  will  then  perhaps  discover  that  that  is 
precisely  what  his  neighbors  need  to  learn — those 
whom  he  finds  indifferent  or  visionary  or  wrong-headed 
about  silver ! 

If  submitting  these  arguments  to  the  American  reader 
in  form  as  delivered  in  Europe  shall  arouse  a  sense 
of  the  realities  of  the  struggle  there  in  progress,  then  at 
least  it  can  be  said  of  these  disjunct  pages  that,  though 
the  road  be  a  rough  one,  still  we  arrive,  as  the  French 
idiom  has  it — we  "get  there,"  and  by  a  shorter  cut. 


PREFACE    TO    SECOND    EDITION.  V 

Among  these  realities  let  me  mark  here  points  which 
it  may  prove  peculiarly  useful  to  dwell  upon  at  this 
juncture,  when  the  air  is  full  of  talk  of  an  International 
Conference,  at  Chicago  or  elsewhere.  Europeans  will 
never  remonetize  silver  merely  because  Americans  wish 
them  to  do  so ;  they  will  do  it  only  when  they  recognize 
it  to  be  their  interest.  An  International  "  Conference  " 
having  as  such  no  original  power  to  establish  a  coin- 
age system,  there  is  sometimes  danger  of  forgetting 
that  what  is  really  wanted  is  action  rather  than  talk. 
Nor  is  the  decision  of  a  ministry,  or  authorization  of 
a  legislature,  to  take  part  in  a  Conference,  necessarily 
anything  more  than  an  expression  of  polite  interest. 

The  real  thing  desired  is  an  Act  of  Parliament,  an 
Act  of  the  French  Legislative  Body,  an  Act  of  the 
German  Imperial  Diet — beside  an  Act  of  Congress. 

As  most  readers  are  aware  that  it  is  no  light  matter 
to  pass  a  bill  in  Congress,  they  will  perhaps  shrink 
back  at  sight  of  the  task — that  has  been  set  for  this 
generation — of  getting  concordant  legislation  in  Europe. 
But  this  generation  or  its  leaders  must  learn  that  it  is 
for  the  interest  of  England,  of  France,  of  Germany  that 
these  respective  acts  be  passed.  Once  it  is  recognized 
that  the  European  outlawry  of  silver  is  a  blunder,  a 
blunder  for  Europe,  and  there  is  daylight  ahead !  A 
campaign  against  the  forces  responsible  for  that  blun- 
der may  be  arduous  and  long,  but  if  there  be  good 
management  it  must  succeed  in  the  end ;  and  what 
American  does  not  wish  to  see  his  country  contribute 


vi  SILVER    IN   EUROPE. 

to  that  management  ?  What  we  are  concerned  about, 
then,  is  the  American  contingent  in  the  forces  of  a 
reform  which  must  show  front  in  Calcutta,  in  Paris, 
and  in  London,  as  well  as  here. 

Moreover,  the  main  strategic  combinations  are  simple, 
in  spite  of  the  expansion  of  the  theatre  of  war.  The 
controlling  headquarters  are  very  near  together.  It 
was  in  Paris  that  the  governments  of  Berlin  and 
London,  in  1881,  made  surrender,  for  the  rest  of  man- 
kind, of  the  main  principles  of  demonetization. 

A  decade  has  passed  since  that  preliminary  victory ; 
heedlessness  and  neglect  have  prevailed.  The  greater 
the  need  of  effort,  of  ability,  and  of  caution,  now ! 

The  Silver  Movement  in  Europe,  unlike  the  free- 
coinage  movement  here,  has  for  its  object  not  the 
local,  but  the  general,  reversal  of  the  outlawry  main- 
tained against  silver,  primarily  by  European  statutes 
and  decrees ;  America's  joining  Europe  in  free  coinage 
when  Europe  is  ready,  being  taken  everywhere  for 
granted.  This  Movement  has  its  history,  its  fortunes, 
its  story  of  good  or  bad  management,  of  local  failures 
or  successes.  It  is  through  experience  of  these  that 
forecast  of  its  future  is  to  be  gained,  and  the  knowledge 
how  Americans  can  assist  in  promoting  good  manage- 
ment in  Europe,  and  likewise  a  sense  be  acquired  of  what 
we  must  avoid  here  lest  our  interposition  weaken  the 
efforts  of  our  allies  in  Europe.  Naturally,  the  action  of 
one  partner  to  a  proposed  agreement  must  influence 
that  of  the  others,  and  it  is  plain  this  country  is  con- 


PREFACE    TO    SECOND    EDITION.  Vll 

stantly  taking  a  hand  in  Silver  Diplomacy,  so  to  speak, 
for  good  or  for  evil,  and  whether  we  are  generally  con- 
scious of  it  or  no.  Evidently  if  we  are  to  help  and  not 
to  hinder,  it  is  doubly  important  that  our  information 
should  be  correct  as  to  the  situation  in  Europe,  and 
that  what  we  do,  and  likewise  what  we  omit  to  do, 
should  be  calculated  with  a  view  to  things  as  they  are ! 

A  word  on  the  task  undertaken  by  the  silver  reform- 
ers abroad. 

As  they  are  the  sole  allies  of  the  American  policy,  it 
is  hardly  less  than  the  duty  of  educated  Americans  to 
recognize  what  they  are  doing. 

What  is  their  work?  It  is  essentially  a  work  of 
education ;  though  agitation  and  management,  both 
political  and  diplomatic,  can  direct  the  work  and 
utilize  its  conquests.  But  ignorance  is  the  enemy  ;  and 
it  is  a  patriotic  work  that  the  reformer  is  doing  in  his 
own  country.  His  struggle  is  not  against  interests,  his 
attack  is  not  upon  the  fortunes  of  any  class  of  his 
fellows,  it  is  upon  their  minds.  Ignorance,  I  repeat, 
is  the  enemy — though  of  course  by  its  side  are  inertia, 
heedlessness,  prejudice,  dulness,  and  the  pride  of 
dogma.  In  short,  the  reformers  are  "right."  The 
English  silver  reformer  is  a  patriotic  Englishman,  the 
French  reformer  a  patriotic  Frenchman,  the  German  a 
patriotic  German. 

The  emphasis  of  this  statement  is  called  for  by 
reason  of  the  opposing  notions  that  are  widely  cur- 
rent among  us,  both  in  the  gold  camp  and  in  the  silver 


viii  SILVER    IN    EUROPE. 

camp,  as  if  silver  were  an  American  interest  alone ! 
Had  that  been  the  case,  its  doom  would  have  been 
sealed  long  ago. 

The  opposition  to  the  Silver  Movement  is  also  some- 
times painted  in  deceptive  colors.  The  language  of 
eloquence  and  of  passion  before  many  a  constituency 
has  presented  an  indictment  against  the  originators  of 
the  outlawry  of  silver  in  Europe,  and  against  its  apolo- 
gists to-day,  as  well  as  against  the  partisans  of  gold  in 
this  country — an  indictment  for  conspiracy  against  the 
rest  of  mankind ! 

This  untenable  indictment  is  a  great  compliment  to 
the  foresight  and  power  of  organization  of  a  class  which 
can  boast  of  quite  as  much  dulness  as  its  neighbors. 

Of  course  special  interests,  and  short  views  about 
them,  affect  opinion,  and  naturally  they  have  played 
their  part  here.  But  in  a  broad  sense,  anti-silver 
legislation  was  adopted  to  satisfy  opinion  based  upon 
avowed  and  legitimate  interests  represented  in  public. 
Everywhere,  in  every  country,  those  learned  in  mone- 
tary matters  were  avowed  inspirers  of  the  movement 
against  silver,  believing  that  they  were  right. 

They  were  wrong  !  Experience  adds  annually  a  new 
volume  of  evidence  to  that  effect.  But  the  lapse  of 
time  also  makes  the  remedy  more  difficult.  The 
greater  the  need  of  a  vigorous  campaign  of  education 
to  the  end  that  the  one  possible  remedy  be  speedily 
applied. 

April,  1892. 


PREFACE. 


A  rising  wave  of  interest  in  Silver  has  within  the  last 
year  been  spreading  over  the  country,  deriving  momentum 
from  the  apparent  need  that  Congress  make  provision  to 
fill  the  void  in  the  money-stock  of  the  country  left  by  the 
retirement  of  the  notes  of  National  Banks.  A  new  stage 
of  discussion  and  of  experimental  legislation  is  thus  to  be 
entered,  in  which  the  status  of  the  white  money-metal  in 
other  lands  will  remain  entitled  to  peculiarly  watchful  and 
earnest  consideration. 

The  following  pages  are  designed  as  a  contribution  to 
that  end. 

It  is  not  to  be  expected  that  they  will  render  justice  in 
detail  to  a  subject  so  multifarious  and  so  pervaded  with 
subtleiies  and  insoluble  problems  that  a  library  could  be 
filled  with  its  literature.  Their  theme  is  the  movement  for 
the  general  restoration  of  Silver  to  legal  equality  with  gold. 
While  the  reader  is  invited  to  consider  topics  that  may 
appear  to  bear  no  close  relation  to  each  other,  the  effect 
as  a  whole  will  be,  I  trust,  to  present  to  him  in  perspective 
the  changing  status  of  the  money-metals,  and  the  changing 
forces  of  opinion  relating  to  that  great  mistake,  the  general 
outlawry  of  silver,  which  only  the  chief  nations  by  uniting 
can  repair. 


iii 


IV  SILVER    IN   EUROPE. 


In  a  review  of  events  the  Monetary  Congress,  held  at 
Paris  in  September  last  (1889),  naturally  conies  into  the 
foreground,  and  as  importance  can  be  attached  to  that  as- 
sembly chiefly  as  the  scene  of  an  English  pro-silver  dem- 
onstration, it  is  here  referred  to  in  connection  with  the 
developments  in  England,  in  a  chapter  which  I  have  en- 
titled THE  PARIS  MONETARY  CONGRESS  AND  THE  ENGLISH 
SILVER  MOVEMENT. 

In  sequence  to  this  a  translation  is  given  of  a  speech  of 
mine  at  the  Congress,  made  in  reply  to  notable  champions 
of  gold  there  present,  to  whose  views  and  authority  it  will 
be  seen  that  I  make  reference,  by  which  further  light  may 
be  thrown  on  the  opinions  current  in  Europe. 

The  nature  and  range  of  the  subjects  involved  in  silver, 
as  they  present  themselves  to  the  European  monetary 
legislator,  are  outlined  in  the  QUESTIONS  addressed,  in 
1887,  to  certain  foreign  scholars  by  the  BRITISH  ROYAL 
COMMISSION  ON  GOLD  AND  SILVER.  In  the  belief  that  my 
work  will  throw  light  into  these  recesses,  I  have  printed 
my  ANSWERS  to  these  Questions,  which  were  handed  to 
the  Commission  in  February,  1888. 

These  are  followed  by  an  examination  of  doctrines  re- 
lating to  monetary  legislation  that  hitherto  have  prevailed 
among  the  learned,  a  paper  entitled  the  PARITY  OF  MONEYS, 

AS  REGARDED    BY    ADAM    SMITH,  RlCARDO,  AND  MlLL — which 

was  printed  in  London  as  an  open  letter  answering  a  ques- 
tion of  a  member  of  the  Royal  Commission,  and  was  sent 


PREFACE.  V 

to  members  of  the  Commission,  then  in  session,  and  to 
others  interested  in  monetary  discussion. ••" 

The  pages  above  referred  to,  devoted  to  the  growth  of 
opinion  in  England,  formed  the  historical  portion  of  an  ad- 
dress on  FEDERATION  FOE  PARITY  OF  MONEYS  AND  THE  AD- 
VANCEMENT OF  SCIENCE,  sent  (in  response  to  invitation)  to 
the  late  meeting  of  the  American  Association  at  Toronto. 
In  that  address  I  endeavored  to  state  the  new  principles 
of  monetary  jurisprudence  in  a  form  at  once  practical  and 
convenient  for  the  general  reader,  and  I  therefore  present 
it  here. 

The  important  issue  raised  before  Congress  and  the 
country  by  the  Eeport  of  Mr.  Winclom,  as  Secretary  of  the 
Treasury,  is  considered  in  its  general  relations  in  a  paper 
entitled  BULLION  OR  COIN,  which  is  supplemented  by  an 
account  of  the  currency  proposals  of  David  Ricardo  (1816), 
under  the  title  RICARDO  ON  BULLION  NOTES  AND  SILVER. 

Another  subject  is  also  discussed,which  explains  itself  by 
the  title,  A  PAN-AMERICAN  DOLLAR  AND  THE  POLICY  OF  UNION. 

In  view  of  current  misapprehensions  with  reference  to 
the  possible  action  of  foreign  Powers,  I  present  some 
considerations  ON  MEASURES  IN  AID  OF  DEMONETIZATION. 

A  selection  of  papers  embodying  proof  and  justification 
of  views  and  evidence  of  facts,  set  forth  throughout  the 
volume,  are  offered  at  the  close  in  the  form  of  a  document- 
ary chronicle  of  THE  ANTI-SILVER  MOVEMENT  AND  ITS  RE- 
VERSAL, which  serves  as  appendix. 

*  London:  Macmillan  &  Co.,  June,  1888. 


ERRATA. 

Page  74,  line  4,  for  "observed"  read  "  obw-ve." 
Page  80,  line  13,  for  "  and  from"  read  "  not  from." 


TABLE    OF  CONTENTS. 


I. — THE  PARIS  MONETARY  'CONGRESS'  (SEPTEMBER,  1889) 
AND  THE  ENGLISH  SILVER  MOVEMENT.     Pages  1-31. 


THE  ORIGIN  AND  EFFECT  OF  THE 
CONGRESS. 

THE  SUBJECT  OF  DEBATE  AND  PRO- 
CEEDINGS. 

The  organization. 

The  subject  of  debate. 

The  diplomatic  situation  of  silver. 

An  English  and  German  demonstra- 
tion in  Paris. 

Academic  debate. 

THE  ADVANCE  OF  OPINION  IN  ENG- 
LAND. 

The  Commons  Committee  of  1876. 

A  fatal  mistake. 

Bonanzas  and  Council  Bills. 

The  Monetary  Conference  of  1878. 


1.  The  attitude  of  the  English 

representatives  at  the  Con- 
ference of  1878. 

2.  Their  attitude  at  the   Mone- 

tary Conference  of  1881. 

3.  The  work  of  agitation  and  edu- 

cation in  England. 

4.  The  Royal  Commission  on  the 

Depression  of  Trade  and  In- 
dustry (1884-'86). 

5.  The    Royal     Commission    on 

Gold  and  Silver  (1886-'88). 
Its  conclusions. 
The  present  situation. 
The  future. 


II. — A  KEVIEW  OF  ANTI-SILVER  ARGUMENTS.     Pages  33-53. 
Speech  in  Eeply  to  Mr.  Levasseur  and  Mr.  Du  Puynode 
(Paris,  September  13,  1889). 


Explanatory. 

The  policy  of  union. 

Why  should  France  object  ? 

The  doctrine  of  the  market. 

The  '  single  gold  standard.' 

Sources  of  this  theory. 

England  its  stronghold. 


Based  on  certain  errors. 

Mr.  Levasseur's  position. 

His  scheme. 

How  it  must  look  to  Englishmen 

and  Germans. 
The  policy  of  demonetization. 


Vlll 


SILVEE    IN   EUROPE. 


III. — QUESTIONS  OF  THE  KOYAL  COMMISSION  ON  GOLD  AND 
SILVER,  AND  ANSWERS.     Pages  55-106. 


Prefatory. 

The  'fall  of  silver.' 

The  Eoyal  Commission.  Its  pur- 
pose and  jurisdiction. 

To  investigate  the  effect  of  well- 
meant  legislation. 

To  recommend  remedies. 

Motion  to  reverse  judgment. 

Universal  bias. 

Ten  years'  delay. 

Answer  explained. 

Preference  for  gold. 

Bonanzas  and  Council  Bills. 

Probable  future  of  silver. 

"Wholesale  prices. 

Appreciation  of  gold. 

Errors  current. 


Stability  and  Parity. 

'  Contraction.' 

Normal  stock. 

England's  condition. 

Supply  of  metal. 

'  Scarcity '  and  Parity. 

The  concept  'standard.' 

Various  aspects  of  '  quantity.' 

Quantity  theory. 

Credit  and  cash. 

Methods  of  economizing  specie. 

Federation  for  Parity. 

Law  of  Parity  and  Gresham's  Law. 

Effect  of  restoring  silver. 

Questions  of  the  ratio. 

Provisional  measures. 

Sensitiveness  and  stabilitv. 


IV. — THE   PARITY    OF   MONEYS   AS    REGARDED    BY   ADAM 
SMITH,  RICARDO,  AND  MILL.     Pages  107-147. 

An  Open  Letter  Answering  a  Question  of  a  Member  of 
the  Royal  Commission  on  Gold  and  Silver. 


The  question. 

Origin  of  the  doubt. 

Cause  of  Parity. 

A  fashion  of  thought. 

From  Adam  Smith  to  Mill. 

A  reign  of  Parity. 

Analysis  superficial. 

Their  practical  notions. 

Money  as  an  object  of  science. 

Mill's  classifications. 

Herbert  Spencer. 

Cause  of  inattention. 

*  Mercantile  svstem.' 


Freedom  and  ms  medicatrix  naturae. 

Nature  and  art. 

Incomplete  grasp. 

Ricardo's  'few  words.' 

Mill  on  Freedom  and  Money. 

Novelty  of  exaggeration. 

The  fable  of  Midas. 

Money  and  Bartec. 

Pliny  and  the  Utopias. 

Mill  and  '  Ideal  Money.' 

A  visionary  hypothesis. 

Conclusion. 

Appendix.     Money  and  the  State. 


TABLE    OF    CONTEXTS. 


IX 


V. — FEDERATION   FOR   PARITY   OF   MONEYS    AND   THE 

VANCEMENT  OF  SCIENCE.     Pages  149-168. 
An  Address  before  the  American  Association. 


AD- 


Abstract. 
Introductory. 

Affirmative  statement  of  the  Fed- 
eralist position. 

1.  That  silver  and  gold  are  the 

money -metals,  and  that  gold 
is  money  and  silver  is  money 
to-day. 

2.  That  parity  of  money  is  desir- 

able. 

3.  That  it  is  the  law  of  each  na- 

tion which  determines  what 
is  money  in  that  nation. 

4.  That   the    preponderant    em- 

ployment— that  is  to  say, 
economic  '  demand '  —  for 
silver  and  gold  is  an  effect 
of  the  laws  of  nations. 

5.  That  monetary  laws  establish 

parity. 

<5.  That  permanent  parity  be- 
tween silver  and  gold  is  pro- 
ducible by  a  proper  regula- 
tion of  their  employment. 


7.  That  concurrent  laws  for  legal 

equality  of  the  metals  in  an 
effective  majority  of  nations 
will  establish  parity  outside 
as  well  as  within  their  direct 
jurisdiction. 

8.  That  such  parity  benefits  each 

nation  by  assuring  compar- 
ative stability  to  the  valua- 
tion in  which  it  is  interested. 

9.  That  federation  is  a  condition 

and  a  guarantee  of  such  con- 
current laws  replacing  those 
which  now  maintain  dis- 
parity. 

10.  That  the  paramount  monetary 
issue  of  the  age  is  whether 
a  settlement  on  this  basis 
should  be  made. 

The  Dis-Unionist  or  Anti-Federalist 
position. 

First  grouping. 

Second  grouping. 


VI. — BULLION  OR  COIN? 

(1)  ft  is  futile  to  treat  the  silver 

dollar  independently  of  sil- 
ver itself. 

(2)  The  people    of    the    United 

States  do  not  take  to  tlie  sil- 
ver dollar  very  kindly. 

The  advantages  of  paper. 

Paper  based  on  bullion. 

Bullion  in  banks. 

The  policy  of  Seigniorage. 

Gratuitous  mintage. 

Free  sale  of  bullion. 


Pages  169-198. 

Monetary  policy  in  the  future. 
Bullion  and  the  general  remoneti- 

zation.  of  silver. 
Free  mintage,  gratuitous  mintage, 

and  free  sale  of  bullion. 
The  policy  of  the  Conferences. 
The  novelty  of  Mr.  Wiudom's  plan. 
Legal  equality  of  the  metals. 
The  parity  of  bullion . 
Resolution  of   American  Bankers' 

Convention. 
Dutch  Bank  Charter  Act. 


X  SILVER   IN    EUROPE. 

VII. — RICARDO  ON  BULLION  NOTES  AND  SILVER. 
Pages  199-208. 

His  idea  of  a  standard.  Modernness  of  anti-silver  doctrine. 

Plans  for  resumption.  Lord   Overstone   and   Mr.  Hag- 

One-pound  notes.  gard. 

VIII. — A  PAN- AMERICAN  DOLLAR  AND  THE  POLICY  OF  UNION. 
Pages  209-222. 

John  Quincy  Adams  on  metrical  re-  Currency  of  foreign  coins. 

form.  Proper  object  of  Federation. 

Course  of  events.  The  American  Conference. 

The  gold  mark.  Position  of  Mr.  T.  J.  Coolidge. 

The  countries  of  the  franc.  Report  of  Committee. 

The  change  of  ratio.  A  Monetary  Union  sanctioned. 
Mexican  dollar  and  Brazilian  mil- 

reis. 

IX. — ON  MEASURES  IN  AID  OF  DEMONETIZATION. 
Pages  223-234. 

Place  where  silver  is  money.  Sources  of  misunderstanding. 

'  Monetizing '  in  one  place  and  de-  Supposed    case    of    the    Bank    of 

monetizing  in  another.  France. 

Political  effect.  Present  use  of  silver  stock. 

Supposed  case  of  Austria-Hungary.  Intervention  of  the  Government. 

Four  methods   of    demonetization  Depressing  gold  price  of  silver. 

distinguished.  Gold  party  and  silver  party. 

The  public  and  private.  Degree  in  which  demonetization  is 
What  loss  ?  facilitated. 

Exaggerations  on  this  head.  Forces  to  prevent. 


TABLE    OF    CONTENTS.  XI 


APPENDIX. 


THE  ANTI-SILVER  MOVEMENT  AND  ITS  REVERSAL.     A  DOCU- 
MENTARY CHRONICLE.     Pages  235-290. 

I. — INTRODUCTORY. 

Character  of  the  movement.  Its    sequel    in    the    Scandinavian 

Successive  steps.  Union,   Germany,  Latin  Union, 

Its  universality.  United  States. 

The  Conference  of  1867.  Relative  value  since  1870. 

II. — THE  WORK  or  THE  CONFERENCE  or  1867.     Pages  241-251. 
REPORT  OF  MR.  DE  PARIETJ. 

The  Monetary  Treaty  of  1865  as  a  Is  the  silver  franc  available  ? 

basis  of  union.  The  primacy  of  gold  in  the  Roman 

Propositions  of  France  to  other  na-  Empire. 

tions  warmly  received,  by  Europe  Its  present  position. 

and  the  United  States.  Gold  the  standard,  with  silver  as 

The  Conference.  'transitory  companion. 

Its  object.  Five  francs  of  gold  nine-tenths  fine 

Variety  of  issiies  raised.  unanimously  chosen  as  the  unit. 

The  program  of  discussion.  25-franc    piece    recommended    by 

Twelve  questions  submitted.  Austria  and  the  United  States. 

Expectation  that  treaties  will    be  Intel-nationality  of  silver  coins  un- 
made to  give  effect  to  decisions.  important. 

Preference   for   the    Latin    Union 
System. 

III.— THE  GERMAN  COMMERCIAL  CONVENTION  OF  1868.     Pages  252-254. 
The  work  of  the  Permanent  Com-       Decimal  system. 

mittee.  Collection  of  essays  to  accompany 

Resolution  adopted.  report  and  petition  to  the  Gov- 

Unity  desired.  ernments. 

Silver  mark  scheme  withdrawn. 
Principles  of  the  Paris  Conference 

of  1867  adopted. 

IV. — THE  PROPOSALS  OF  THE  UNITED  STATES  BEFORE  THE  CONFERENCE  OF 
1878.     Pages  255-259. 

Propositions  stated.  Answer  of  European  Delegates. 

Propositions  held  in  reserve.  Reply  of  American  Delegates. 


Xll  SILVER    IN    EUROPE. 

V.— THE  CONFERENCE  OF  1881.     Pages  259-261, 
Declarations    of    France    and   the       Question  of  ratio. 

United  States.  Its  permanence. 

Evil  and  remedy.  Resolutions  for  adjourned  meeting 

Concurrent  action.  in  1882. 

VI. — THE  PROPOSED  CONFERENCE  OF  1882.     Pages  261-262. 
Copy  of  Identical  Note  sent  to  the  meiitsof  France  and  of  the  United 

Various  Powers  by  the  Govern-  States. 

VII. — FOREIGN   COINS   AS   LEGAL   TENDER   AND   THE   POLICY  OF   UNION. 

Pages  263-265. 
Coinage  systems  in  cases  of  con-       Novel   situation   produced   by  the 

quest  or  union.  attack  upon  silver. 

Instances  in  history.  The   material  becomes  chiefly  im- 

Coinage  treaties  in  the  past.  portant. 

Refer  chiefly  to  weight  and  device.       Legal  equality  of  metals. 
Two  metals  recognized  as  material       Disadvantages  avoided. 

of  money. 

VIII. — THE  ROYAL  COMMISSION  ON  GOLD  AND  SILVER,  1886-1888. 

Pages  266-273. 

EXTRACTS  FROM  THE  FINAL  REPORT. 
PART  I.  Apprehensions  discussed. 

Peculiarity  of  supply.  PART  III. 

Agencies  controlling  demand.  Gravity  of  situation. 

India  Council  Bills.  Experiment  of  unregulated  use  of 

Influence  of  the  Latin  Union  ratio.  money-metals. 

PART  II.  Breach  in  1873-' 74. 

Interest  of  India.  Proposed  remedy. 

Conditions  of  a  stable  ratio. 

IX. — THE  STRENGTH  OF  THE  ENGLISH  SILVER  PARTY.     Pages  274-281. 
Platform  of  Bimetallic  League,  and       The  Silver  Deputation  of  May  30, 
list  of  officers.  1889.     (List.) 

X.— THE  MONETARY  CONGRESS  OF  THE  FRENCH  EXPOSITION  (1889). 

Pages  282-284. 
List  of  official  delegates.  List  of  Congresses. 

APPENDIX  TO  CHAPTER  VII.     Pages  285-290. 
Currency  Proposals  of  D.  Ricardo. 


I. 

THE  PARIS  MONETARY  'CONGRESS 

(SEPTEMBER,  1889) 

AND    THE 

ENGLISH  SILVER  MOVEMENT. 


THE  PABIS  MONETARY  <  CONGRESS '  (SEPT.,  1889), 
AND  THE  ENGLISH  SILVER  MOVEMENT. 

THE  ORIGIN  AND  EFFECT  OF  THE  CONGRESS. 

The  idea  of  having  international  meetings,  reunions,  or 
conventions  at  the  time  of  an  international  exhibition  of 
products  is  very  readily  conceived,  and  sure  to  recom- 
mend itself ;  and  having  been  put  in  practice  by  the  French 
in  1867  and  in  1878,  it  was  very  natural  that  the  rule 
should  be  followed  in  1889.  But  while  monetary  reform 
is  sufficiently  important,  one  would  say,  to  dictate  its  own 
times  and  places,  it  is  a  curious  fact  that  it  has  been 
brought  to  the  fore-front  in  Paris  at  the  date  of  each  of  the 
French  Exhibitions,  and  yet  from  motives  or  reasons  in 
each  case  distinct. 

The  Exhibition  of  1867,  the  first  of  its  kind,  offered  the 
advisers  of  the  Emperor  Napoleon  an  occasion  for  ad- 
vancing the  primacy  of  France  upon  the  very  path  of 
light — that  is  to  say,  in  every  direction.  Far-sighted 
policy  had  already  brought  the  unification  of  monetary 
systems  within  their  range.  It  was  in  August,  1866,  that 
a  treaty  of  monetary  union  with  Belgium,  Switzerland,  and 
the  new  kingdom  of  Italy  had  come  in  force,  to  which  in 
1867  Greece,  Rournania,  and  the  Papal  States  gave  their 
adhesion.  Correspondence  with  other  nations  had  fol- 


THE   PAEIS    CONGRESS    OF    1889. 

lowed  upon  this  notable  achievement,  with  a  view  to  their 
joining  this  'Latin'  union,  and  when  in  due  time  the  dis- 
position of  nations  was  sufficiently  ascertained,  a  Confer- 
ence was  called  in  Paris  for  June  1867,  at  which  were 
present  the  delegates  of  twenty-two  nations,  including  the 
United  States.  It  is  to  be  noted  that  at  about  the  same 
date  there  was  also  at  Paris  a  '  Congress  of  the  Exposi- 
tion,' which  dealt  with  Weights,  Measures,  and  Coins. 
This  has  sometimes  been  confounded  with  the  '  Conference 
of  1867.' 

The  origin  of  the  Monetary  Conference  held  in  Paris  in 
1878,  the  year  of  the  second  great  French  Exposition,  is 
to  be  sought  in  Washington,  in  the  second  section  of  the 
Act  of  Congress  of  February  28, 1878,  directing  the  calling 
of  a  Conference  in  Paris  within  six  months.  This  Ameri- 
can Conference  is  well  entitled  to  be  known  as  the  Confer- 
ence of  1878,  albeit  there  was  also  a  Conference  of  the 
States  of  the  Latin  Union  in  Paris  in  the  same  year. 

The  meeting  in  1889  of  which  we  are  speaking  was 
merely  a  '  Congress  of  the  Exposition,'  and  came  into 
being  without  any  distinctive  fatherhood  of  government  or 
signification  of  political  or  public  interest. 

In  December,  1888,  the  Floquet  Ministry  having  the 
arrangements  for  the  Exhibition  on  their  hands,  a  list  was 
made  of  conventions,  as  we  should  call  them,  to  be  held 
during  its  pendency,  and  among  them  was  suggested  a 
monetary  convention.  The  monetary  question,  with  sixty- 


ITS 

eight  other  subjects,*  was  put  on  the  list,  and  an  organiz- 
ing committee  was  appointed. 

Such  was  the  origin  of  the  Conyres,  as  it  is  called  in 
French. 

No  purpose  was  fixed,  no  jurisdiction  assigned,  except- 
ing in  so  far  as  the  word  "  monetary "  has  a  meaning. 
The  character  and  effect  of  the  Congress  was  left  to  the 
future,  and  must  depend  upon  those  who  thereafter  should 
take  it  in  hand. 

In  setting  forth  the  outcome  of  the  meeting  I  shall  adopt 
the  language  of  an  '  interview '  (in  the  Paris  New  York 
Herald  of  September  15,  1889),  the  informality  of  which 
will  be  excused  in  consideration  of  its  directness  and 
brevity. 

To  one  familiar  with  the  political  aspects  of  Silver  it 
was  plain  that  this  accidental  Congress  contained  an  ele- 
ment of  danger  to  the  future  of  the  project  of  Monetary 
Federation.  It  was  perhaps  unfortunate  that  this  ap- 
parently aimless  assembly  was  called,  but  it  had  been 
called,  and  called  under  the  auspices  of  the  French  Gov- 
ernment, which,  in  1881-'2,  had  joined  the  United  States 
in  supporting  that  project.  The  only  thing  to  do  for  the 

*  The  Exhibition  was  under  the  direction  of  the  Ministry  of  Commerce 
and  Industry.  The  Monetary  Congress  was  held  in  a  hall  in  the  Trocadero 
Palace.  If  I  remember  rightly  there  was  a  Congress  on  Co-operative  Stores, 
a  Fire  Brigade  Congress,  and  a  Railway  Congress  about  the  same  time. 
The  latter  was,  I  believe,  independent  of  the  Exposition.  The  list  may 
interest  the  curious  in  connection  with  the  coming  Quadricentennial,  and  I 
have,  therefore,  reprinted  it  in  the  Appendix. 


6  THE    PARIS    CONGRESS    OF    1889. 

cause  was  to  prevent  the  meeting  from  being  a  failure, 
and,  on  the  contrary,  so  far  as  was  practicable,  to  make 
it  a  success. 

The  subject  had  long  been  in  abeyance  on  the  Conti- 
nent. In  the  years  since  1882  the  scheme  of  joint  action 
of  nations  to  restore  silver  had  come  to  seem  very  remote, 
and  since  1885  had  been,  as  it  were,  concealed  from  view 
by  the  nearer,  though  comparatively  trivial  monetary  is- 
sues connected  with  the  fate  of  the  Latin  Union.  It 
was  in  1885  that  the  second  term  of  the  Monetary  Treaty 
of  1865  expired,  and  the  various  Monetary  Systems  of 
Europe  have  an  interest  in  the  future  of  this  Treaty 
Union,  either  directly  or  through  relations  with  the  par- 
ties to  it.  It  is  now  in  full  force  (as  modified)  only  from 
year  to  year,  and  is  liable  to  be  terminated  by  notice  at 
the  will  of  any  of  the  Signatory  Powers.  Under  the  cir- 
cumstances, it  appeared  that  if  the  scheme  of  a  new  Mone- 
tary Union  was  to  be  dealt  with  in  Paris  with  benefit  to 
the  cause,  it  was  from  England,  where  silver  has  long  been 
a  subject  of  agitation — and,  if  possible,  from  Germany 
also — that  impulse  and  reinforcement  must  come. 

In  the  end  the  great  Deputation  of  English  '  silver  men ' 
(see  Appendix)  which  waited  on  Lord  Salisbury  and  Mr. 
Goschen  on  May  30,  elicited  a  response  from  them  which 
simplified  the  problem,  what  was  to  be  done  with  this  Con- 
gress in  Paris.  That  response  challenged  the  friends  of 
silver  to  make  a  showing  in  the  Congress. 

It  was  a  change  of  venue,  but  it  has  not  operated  to  our 
disadvantage.  As  I  had  the  opportunity  of  pointing  out 


ITS    EFFECT.  7 

to  them  this  challenge  opened  to  English  allies  of  the 
cause  the  occasion  to  break  the  'boycott'  which  the  Lon- 
don press  has  steadily  maintained  against  them  hitherto. 
Independently  of  all  else,  this  effort  was  worthy  of  their 
energy. 

This  advantage  has  been  fully  gained.  It  will  be  evi- 
dent to  English  readers  that  when  the  London  Times  pub- 
lishes a  column  and  a  half  on  silver,  telegraphed  from 
Paris  by  Mr.  de  Blowitz,  as  it  has  to-day,  a  new  stage  in 
the  progress  of  the  cause  of  Monetary  Union  has  been 
reached. 

The  Congress  has,  in  fact,  been  a  field-day,  in  which 
the  reformers  of  England  and  Germany  have  displayed 
their  forces.  They  have  made  a  report  upon  the  good 
work  of  conversion  that  is  going  on  in  their  countries. 
That  work  of  conversion  is  the  very  life  of  the  cause. 
There  have  been  only  these  two  chief  Powers  left  to  be 
converted  since -France  and  the  United  States,  by  the  Con- 
ference of  1881  and  1882,  put  the  future  of  silver  at  their 
door.  Germany  waits  for  England,  and  England  is  mov- 
ing in  the  path  of  conversion. 

But  beside  this  effect,  we  have  obtained  the  tactical 
advantage  of  bringing  the  representatives  of  primitive 
economic  orthodoxy  face  to  face  with  the  leaders  of  a  liv- 
ing reform — requiring  the  former  to  face  a  responsibility 
which  they  had  never  fully  realized  before.  Some  of  these 
well-meaning  academicians  begin  to  recognize  that  their 
anti-silver  and  anti-parity  theories  are  somewhat  incom- 
plete. 


8  THE   PARIS    CONGRESS    OF    1889. 

The  total  effect,  then,  of  this  interchange  of  opinion 
has  been  excellent.  It,  in  some  measure,  disarms  opposi- 
tion on  the  Continent  and  certainly  strengthens  the  hands 
of  the  friends  of  silver  in  England. 

Beyond  this,  of  course,  the  Congress  can  have  no 
effect.  It  was  understood  beforehand  that  it  was  free  to 
all  who  were  interested  in  monetary  discussions,  and  that 
no  vote  was  to  be  taken.  It  was  only  a  demonstration  of 
opinion,  an  occasion  for  interchange  of  views.  The  ob- 
ject proposed  has  been  attained  in  fair  measure.  To  re- 
vive the  interest  in  the  subject,  which  on  the  Continent 
had  very  generally  died  out,  and  to  answer  the  challenge 
of  Lord  Salisbury  and  Mr.  Goschen,  and  bring  new  light 
into  English  anti-silver  circles,  cannot  fail  to  strengthen 
the  cause  of  Monetary  Union. 

For  certainty  of  clearness  I  should  make  reference 
to  the  erroneous  information  that  obtained  currency  in 
the  United  States,  at  and  about  the  date  of  its  occur- 
rence, as  to  the  scope  and  character  of  the  '« Congress." 
It  seems  to  have  been  generally  supposed  to  be  an  official 
body*  with  diplomatic  functions,  like  the  Conferences  held 
in  1878  and  1881,  and  remark  was  widely  made  in  the 
press  upon  its  failure  to  come  to  a  vote ;  an  impression 

*  Official  color  was,  in  fact,  given  to  this  error  (no  doubt  inadvertently) 
through  the  publication,  under  the  auspices  of  the  Departments  in  Wash- 
ington, both  before  and  after  the  Congress,  of  a  Consular  report,  dated 
July  8,  in  which  the  Congress  was  referred  to  in  the  same  terms  as  the 
Conference  of  1881,  and  into  which  some  other  analogous  errors  had 
crept. 


THE    COURSE    OF    DEBATE.  9 

quite  natural  though  erroneous ;  but  misleading  in  a  high 
degree,  raising  as  it  did  the  whole  question  of  the  '  for- 
eign relations  '  of  money,  and  especially  of  the  future  of 
silver. 

The  list  of  official  representatives  at  the  Congress  is 
given  in  the  appendix.* 

THE  SUBJECT  OF  DEBATE 

AND  PROCEEDINGS  OF  THE  CONGRESS. 

The  Organization. 

The  Congress  was  opened  Sept.  11,  with  a  letter 
from  M.  Kouvier,  the  Minister  of  Finance,  read  by  M. 
Magnin,  Vice-President  of  the  Senate,  Governor  of  the 
Bank  of  France,  who  was  President  of  the  Committee  of 
Organization,  and  became  the  President  of  the  Congress. 
M.  Pelligrini,  Vice-President  of  the  Argentine  Republic, 
was  made  Honorary  President,  and  to  the  names  of  Le*on 
Say  and  Cernuschi,  Vice-Presidents  of  the  Committee  and 
of  the  Congress,  were  added  those  of  Dana  Horton,  Emile 
deLaveleye,  Grenf ell,  Levasseur,  Luzzatti,  and  MaxWirth.t 
The  presence  of  official  delegates  from  the  British  Indian 
Empire  (Mr.  Fremantle,  Master  of  the  Mint,  and  Mr.  Mur- 
ray, of  the  Treasury),  from  Japan,  and  from  the  South 

*  Of  my  countrymen  I  know  only  of  Mr.  D.  O.  Mills  and  Mr.  Edward 
Tuck  as  being  there.  The  latter  was,  I  believe,  owing  to  a  clerical  error, 
mentioned  in  some  quarters  as  being  a  delegate  of  the  United  States,  but 
this  error  was  at  once  corrected  by  Mr.  Tuck.  There  was  no  official  rep- 
resentation on  the  part  of  the  United  States  Government. 

t  This  list  is  also  given  in  the  alphabetic  order  of  countries. 


10  THE    PARIS    CONGRESS    OF    1889. 

American  States,  to  mention  no  others,*  shows  the  range  of 
attention  excited  by  the  Congress. 

The  Subject  of  Debate. 

For  the  debates  an  ample  series  of  subjects  had  been 
set  forth,  but  in  the  end  one  paramount  subject  engrossed 
attention,  and  occupied  the  entire  space  of  the  six  sessions 
of  the  Congress  (Sept.  11-14). 

The  restoration  of  silver  to  its  former  legal  equality 
with  gold,  in  a  strong  Union  of  nations,  remains,  as  it  has 
long  been,  the  order  of  the  day. 

The  Diplomatic  Situation  of  Silver. 

A  brief  retrospect  is  necessary  to  indicate  the  stage  now 
reached  in  the  movement  for  the  adoption  of  this  measure. 
Silver  having  become  in  1876  the  object  of  agitation  in 
both  continents,  the  proposal  of  a  federation  for  concur- 
rent free  mintage  of  the  two  metals  was  formally  made  by 
the  United  States  in  a  Diplomatic  Conference  called  to 
meet  in  Paris  in  1878.  In  1881  the  proposal  was  renewed 
by  France  and  by  the  United  States  (acting  upon  the  sug- 
gestion of  France)  in  a  Conference  called  in  Paris  for  that 
year.  The  respective  attitudes  of  nations  then  disclosed, 
offered  substantial  concurrence  of  all  in  joint  measures  to 
bring  about  the  end  proposed,  a  stable  parity  of  the  metals. 
But  the  quota  of  co-operation  offered  by  two  of  the  chief 
Powers— England  and  Germany — fell  short  of  that  pro- 
posed by,  and  expected  from,  the  others.  The  partial  pro- 

*  The  full  list  will  be  found  in  the  Appendix. 


AN    ENGLISH    DEMONSTRATION.  11 

silver  measures  offered  by  England  and  Germany  were  con- 
ditioned upon  complete  restoration  of  free  mintage  in  other 
States,  upon  whom,  accordingly,  the  burden  of  maintain- 
ing the  parity  of  the  world's  money  would  substantially 
fall. 

France  and  the  United  States  were  not  satisfied  with 
this  quota  from  the  two  other  Powers ;  they  required 
more  effective  co-operation  before  they  would  open  their 
mints  freely  without  limit  to  new  silver.  Thus  the  halting 
attitude  of  England — for  Germany  would  have  followed 
England  in  a  further  advance — broke  up  the  proposed 
alliance.  Since  the  Conference  of  1881  and  1882  the 
issue — What  England,  and  in  second  rank  what  Germany, 
is  ready  to  do,  has  remained  the  paramount  practical  issue 
in  this  field,  down  to  the  present  day. 

The  task  evidently  pre-ordained  for  the  meetings  in 
the  Trocadero  was  to  collect  and  focus  light  upon  this  sit- 
uation. 

An  English  and  German  Demonstration  in  Paris. 

In  his  opening  discourse,  M.  Magnin  pointed  the 
moral  of  late  occurrences  in  England  which  decisively  es- 
tablish a  new  point  of  departure,  and  especially  of  the  Silver 
Deputation*  which  waited  upon  the  Marquis  of  Salisbury 
and  the  Chancellor  of  the  Exchequer,  on  May  30,  last, 
and  of  the  response  then  elicited  from  the  heads  of  the 
English  Government.  The  Deputation  was  pronounced, 


*  See  list  in  Appendix. 


12  THE    PARIS    CONGRESS    OF    1889. 

it  is  understood,  by  so  competent  a  judge  as  Lord  Rowton, 
to  be  the  strongest  Deputation  which  ever  waited  upon  a 
Minister  of  the  Crown.  The  answer  of  Lord  Salisbury  and 
Mr.  Goschen  seemed  to  single  out  the  coming  Monetary 
Congress  of  the  French  Exposition  as  an  arena  where  the 
cause  of  silver  was  to  be  fought  for. 

The  account  already  given  of  the  Congress  shows  that 
the  challenge  was  accepted.  The  English  bimetallists 
deployed  their  forces  in  great  strength.  Mr.  Henry 
McNiel,  the  Chief  Secretary  of  the  Bimetallic  League, 
was  present.  Addresses  from  Mr.  Henry  R.  Grenfell, 
Ex-Governor  and  Director  of  the  Bank  of  England,  Vice- 
President  of  the  League ;  Sir  Henry  Meysey-Thomson ; 
Professor  H.  S.  Foxwell,  Fellow  of  St.  John's  College, 
Cambridge,  Professor  of  Political  Economy  in  University 
College,  London  ;  Mr.  Fielden,  the  representative  of  the 
Workingmen's  Organizations  of  Lancashire  ;  proved  that 
the  work  put  upon  Englishmen  in  1881  had  been  manfully 
performed  with  a  success  which  seems  to  promise  final 
triumph.  A  similar  report  from  Germany,  in  the  address 
of  Dr.  Otto  Arendt,  the  leader  of  the  silver  agitation  in 
Germany,  with  a  letter  from  Freiherr  von  Kardorff,  its 
parliamentary  leader,  made  like  answer  for  Germany,  and 
certified  that  the  government  in  Germany  would  second 
the  policy  of  England,  as  has  been  generally  maintained. 


THE    COURSE    OF    DEBATE.  13 

Academic  Debate. 

As  a  supplement  to  this  entirely  practical  proceeding — 
in  which  representatives  of  English  and  German  opinion 
made,  in  Paris,  a  report  of  the  progress  of  their  countries 
toward  the  Monetary  Alliance  *  before  proposed,  in  Paris, 
by  the  United  States  and  by  France — ample  space  was 
offered  for  academic  debate.  Fortunately  for  the  liveli- 
ness of  interest  felt  in  each  succeeding  session  of  the 
Congress,  the  phases  of  opinion  which  make  up  the  op- 
position to  the  policy  of  Parity  Union,  found  ample  repre- 
sentation among  the  Parisian  members  of  the  Congress. 
MM.  Levasseur,  Frederic  Passy,  Fournier  de  Flaix, 
Du  Puynode,  Clement  Juglar,  Mannequin,  Cochut,  and 
MM.  Coste  and  Kaffallovich  (who  were  the  secretaries 
of  the  Congress)  presented  anti-silver  arguments  made 
familiar  to  monetary  students  by  the  Conference  of  1867 
and  by  the  opposition  speakers  in  the  Conferences  of  1878 
and  1881, — bringing  down  to  date,  as  it  were,  the  argu- 
ments of  the  gold  party  in  Europe — while  the  affirmative 
was  represented  by  a  list  of  speakers,  among  whom  M. 
Cernuschi  was  prominent,  and  which  numbered,  beside 
those  already  mentioned  (and  myself)  M.  Emile  de  Laveleye  ; 
M.  Alphonse  Allard,  of  Belgium  ;  M.  Boissevain,  of  Hol- 
land ;  M.  Lalande,  of  Bordeaux ;  and  M.  Moret,  Ex-Minister 
of  Foreign  Affairs  of  Spain. 


*  This  Quadruple  Alliance  is  assumed  to  secure  the  adhesion  of  lesser 
Powers. 


14  THE  ENGLISH  SILVER  MOVEMENT. 

THE  ADVANCE  OF  OPINION  IN  ENGLAND. 

I  now  set  forth  in  brief  outline  the  course  of  events 
which  led  to  this  demonstration  in  Paris  of  British  interest 
in  the  Restoration  of  Silver. 

Silver  became  the  object  of  public  attention  in  England 
in  1876,  which  was  the  date  of  the  phenomenal  fall  in  its 
'  price '  and  of  the  opening  of  those  discussions  in  Congress 
and  in  the  Silver  Commission  then  appointed,  that  were 
closed  with  the  final  passage  of  the  Coinage  Act  of  Feb- 
ruary 28, 1878.  A  Select  Committee  of  the  House  of  Com- 
mons, of  which  Mr.  Goschen  was  Chairman,  made  its  re- 
port on  the  Depreciation  of  Silver  in  the  summer  of  1876. 

The  Select  Committee  of  1876. 
The  conclusions  of  the  Report  were  as  follows : 

"  Your  Committee  are  of  opinion  that  the  evidence  taken 
conclusively  shows  that  the  fall  in  the  price  of  silver  is 
due  to  the  following  causes  : 

"  1.  To  the  discovery  of  new  silver  mines  of  great  rich- 
ness in  the  State  of  Nevada. 

"  2.  To  the  introduction  of  a  gold  currency  into  Ger- 
many in  place  of  the  previous  silver  currency.  This 
operation  commenced  at  the  end  of  1871. 

"3.  To  the  decreased  demand  for  silver  for  export  to 
India. 

"  It  should  be  added— 

"  4.  That  the  Scandinavian  Governments  have  also 
substituted  gold  for  silver  in  their  currency. 


THE    COMMONS    COMMITTEE    OF    1876.  15 

"  5.  That  the  Latin  Union,  comprising  France,  Belgium, 
Switzerland,  Italy,  and  Greece,  have,  since  1874,  limited 
the  amount  of  silver  to  be  coined  yearly  in  the  mints  of 
each  member  of  the  Union,  suspending  the  privilege,  for- 
merly accorded  to  all  holders  of  silver  bullion,  of  claiming 
to  have  that  bullion  turned' into  coin  without  restriction. 

"  6.  That  Holland  has  also  passed  a  temporary  act,  pro- 
hibiting, except  on  account  of  the  Government,  the  coin- 
ing of  silver,  and  authorizing  the  coining  of  gold. 

"  It  will  be  observed  that  two  sets  of  causes  have  been 
simultaneously  in  operation.  The  increased  production 
of  the  newly-discovered  mines,  and  the  surplus  silver 
thrown  on  the  market  by  Germany  have  affected  the 
supply.  At  the  same  time  the  decreased  amounts  required 
for  India,  and  the  decreased  purchases  of  silver  by  the 
members  of  the  Latin  Union,  have  affected  the  demand. 
A  serious  fall  in  the  price  of  silver  was,  therefore,  in- 
evitable." 

A  Fatal  Mistake 

The  Committee  made  the  radical  mistake  of  putting 
among  the  causes  of  the  change  of  ratio  between  silver  and 
gold,  not  only  without  qualification  but  even  first  on  the 
list,  the  Nevada  Bonanzas — a  factor  whose  efficiency  in 
lowering  silver  existed  purely  by  favor  of  other  factors 
mentioned,  and  which  therefore  should  be  placed  in  a  dis- 
tinct and  subordinate  position,  with  clear  indication  of  its 
nullity  from  the  point  of  view  of  state  policy.  The  same 
error  applies  to  the  factor  which  in  the  list  above  is  num- 


16  THE    ENGLISH    SILVER    MOVEMENT. 

bered  3,  ancTwliich  is  better  known  under  the  name  of 
the  India  '  Council  Bills,'  a  factor  which  is  also  nil  ex- 
cept by  reason  of  the  others.  These  two  factors  belong 
to  the  second  line  of  fructifying  causes.  Granted  the  action 
of  governments — that  is  to  say,  the  laws  and  decrees  which 
closed  the  mints  of  Europe  to  silver,  the  gold-rate  of  silver 
might  naturally  suffer  some  increase  of  its  fall  by  reason 
of  enlarged  new  supply  from  the  Bonanzas,  and  likewise 
by  reason  of  diminished  demand  for  India.  But  in  the 
absence  of  these  anti-silver  laws  and  decrees  it  would  have 
suffered  no  fall  whatever.  The  "  demand  "  for  mintage  to 
which  the  Committee  refers,  was  in  the  case  of  the  Latin 
Union  a  demand  of  character  absolutely  distinct,  a  fixed- 
ratio  demand,  a  preordained  employment  equalizing  silver 
with  gold  at  that  ratio. 

The  truth  thus  ignored  by  the  Committee  is  the  very  pith 
and  marrow  of  the  whole  business,  so  that  their  report  is 
a  brilliant,  and  most  unfortunate,  exemplification  of  the 
obscurity  of  monetary  questions.  It  was  twelve  years  later 
that  the  truth  which  the  Committee  of  1876  might  have 
seen  but  failed  to  see,  was  officially  recognized,  namely, 
by  the  Koyal  Commission  on  Gold  and  Silver. 

Yet  the  course  of  reasoning  which  leads  to  this  truth 
seems  not  too  difficult.  It  was  merely  necessary  to  study 
with  unprejudiced  eye  both  sides  of  the  policy  of  demone- 
tization which  had  been  adopted  on  the  Continent ;  or  in 
other  words  to  inquire  what  would  have  happened  to  the 
ratio  between  the  money  metals  if  free  mintage  had  been 
maintained  in  Europe  for  silver  as  well  as  for  gold, 


BONANZAS    AND    COUNCIL    BILLS.  17 

This  inquiry  was  really  imposed  by  the  mandate  under 
which  the.  Committee  did  its  work.  One  would  suppose 
it  a  natural  course  for  a  legislator  brought  face  to  face 
with  a  business  catastrophe  following  directly  upon  a  rev- 
olutionary series  of  laws  of  outlawry  directed  specifically 
against  the  object  chiefly  involved  in  the  catastrophe,  to 
inquire  whether  the  catastrophe  could  have  occurred,  or 
what  would  have  happened,  if  these  peculiar  laws  had  not 
been  passed  ;  that  is  to  say,  if  the  object  in  question,  sil- 
ver, had  been  left  alone  where  it  was.  Yet,  it  was  this 
which  Mr.  Goschen's  Committee  omitted. 

The  causes  marked  2,  4,  5,  6,  taken  together,  are  the 
Acts  of  Demonetization.  Without  these  Acts  the  "  fall  in 
the  gold  price  of  silver  "  could  not  have  occurred.  These 
acts  were  within  the  control  of  governments  ;  they  could 
be  reversed  or  repealed,  and  thus  an  end  could  be  put  to 
the  '  fall.'  A  proposition  to  that  effect  from  Mr.  Goschen's 
Committee  or  from  the  House  of  Commons  would  have  met 
with  cordial  support  in  other  nations.  On  the  other  hand 
the  factors  which  the  Committee  marked  1  and  3  were  not 
within  control.  No  one  would  seriously  propose  to  close 
the  mines  of  the  Eocky  Mountains ;  nor  to  cancel  that  debt 
of  India  to  Europe  which  led  to  the  use  of  Council  Bills 
for  clearance  between  the  continents,  by  which  debit  and 
credit  were  balanced  as  far  as  they  would  go,  and  the  un- 
necessary shipment  of  specie  avoided.  Hence  in  putting 
into  the  front  rank  these  ancillary  and  subordinate  factors, 
the  Committee  established  a  bar  to  action.  With  such 
impossibilities  in  the  foreground  it  was  plausible  to  treat 


18  THE    ENGLISH    SILVER    MOVEMENT. 

the  intervention  of  Governments  in  reference  to  Silver  as 
quite  out  of  the  question. 

The  error  went  to  the  very  life  of  reform.  It  was  a 
dogma  of  paralysis.  No  estimate  was  made  of  the  evils  to 
arise  from  the  situation  thus  analyzed,  and  no  remedial 
measures  were  suggested.  The  unfortunate  result  is  seen 
in  that  sluggishness  of  the  forward  movement  to  recognize 
the  neglected  truth,  of  which  the  following  pages  are  a  brief 
record. 

To  assist  the  reader  unfamiliar  with  the  subject  to 
make  these  several  conclusions  his  own,  I  pursue  in  some 
detail  the  query,  what  effect  bonanzas  of  silver  could  have 
had  on  the  ratio  between  silver  and  gold  if  silver  had  re- 
mained freely  coinable  money  in  Europe  just  as  it  was 
before  the  Acts  referred  to  were  passed.  What  could 
happen  ? 

Let  us  follow  in  imagination  the  advent  in  Europe  of 
this  tiny  stream  of  Nevada  Silver,  turning  itself  into  coin 
at  Paris  and  Brussels,  Utrecht,  Berlin,  and  so  on,  and 
gradually  adding  itself  to  the  thousand  millions  dollars' 
worth  of  silver  coin  already  there,  with  other  thousands  of 
gold  (beside  paper)  in  use  side  by  side  with  them.  What 
would  be  the  result  ? 

A  little  more  silver  money  in  Europe !  That  is  all ! 
What  difference  would  that  make  ?  How  could  that  affect 
the  ratio  of  gold  to  silver  ? 

Any  change  that  occurred  must  naturally  take  the  form 
of  a  premium  on  gold.  How  could  an  increase  of  the 
silver  stock  produce  that  effect— a  gradual  increase,  say  of 


BONANZAS    AND    COUNCIL    BILLS.  19 

5  per  mille,  or  one  per  cent.,  or  2  per  cent.,  as  compared 
with  the  moneys  of  Europe  ?  Nay,  let  us  ask  whether  if 
all  the  bonanzas,  unrelieved  by  Indian  demand,  had  been 
unloaded  in  France  alone,  they  could  have  driven  gold  to 
a  premium  ?  Impossible  !  Even  the  suspension  of  specie 
payments  by  the  Bank  of  France  did  not  do  that.  In- 
deed, France  would  have  held  less  silver  metal  in  any 
case  than  she  holds  to-day,  when,  in  spite  of  the  fall  of 
silver  bullion  her  silver  coin  is  not  at  a'  discount.  Of 
course  our  supposition  really  implies  that  the  new  silver, 
so  far  as  it  went  to  the  European  continent,  would  be  dis- 
tributed among  all  the  money-using  populations  of  the 
continent. 

The  reader  will  find  this  supposition  pregnant  with  sug- 
gestions ;  especially  when  he  realizes  that  but  for  the  closing 
of  the  mints  to  silver  through  ill-advised  statute  and  de- 
cree, new  life-blood  would  have  poured  into  the  circulation 
of  Europe,  most  welcome  to  the  veins  depleted  by  the 
collapse  of  credit  in  the  years  of  disorganizing  liquidation 
after  1872.  And  not  even  the  wildest  doctrinaire  would 
have  prophesied  a  premium  on  gold. 

So  much  was  lost  by  the  Committee's  failure  to  pene- 
trate below  the  surface  of  their  subject !  Yet  the  points 
I  have  referred  to  were  apparent  to  some  who  were  study- 
ing the  subject  at  the  time — among  whom  I  may  myself 
be  numbered.  The  report  of  the  Congressional  Commis- 
sion appointed  in  1876  is  in  striking  contrast  to  that  of 
the  Committee  of  the  House  of  Commons, 


20  THE    ENGLISH    SILVER    MOVEMENT. 

The  Conference  of  1878. 

The  second  section  of  the  Act  of  Congress  of  February 
28,  1878,  proposed  the  restoration  of  silver  by  concurrent 
action  of  nations. 

In  pursuance  of  that  Act  an  invitation  was  issued  by 
Mr.  Evarts,  then  Secretary  of  State,  to  the  Governments 
of  the  principal  European  nations,  which  was  accepted  by 
all,  with  the  exception  of  Germany.  The  Conference  met 
in  Paris  in  August,  1878,  as  the  guest  of  the  French  Re- 
public, in  the  Palace  of  the  Ministry  of  Foreign  Affairs. 

The  resolutions  adopted  in  this  Conference,  together 
with  those  adopted  in  the  Third  International  Monetary 
Conference,  which  was  called  by  France  and  by  the  United 
States  in  1881,  are  set  forth  in  the  Appendix. 

The  advance  of  opinion  in  England  on  the  subject  pre- 
sents itself  in  the  following  successive  stages  : 

1.  The  attitude  of  the  English  representatives  at  the 
Monetary  Conference  of  1878. 

The  speeches  of  Mr.  Goschen  at  Paris  put  the  veto  of 
English  science  and  sagacity  upon  the  further  rejection  of 
silver  money  upon  the  Continent.  This,  logically,  was 
not  only  an  abandonment  of  the  case  for  England's  anti- 
silver  laws,  but  it  operated  as  an  admission  that  the  oppo- 
site of  such  rejection,  the  restoration  of  silver  (proposed 
by  the  United  States),  was  a  measure  which  would  benefit 
the  United  Kingdom.  It  was  thus  an  affirmation  of  the 
internationally  of  money. 


THE  CONFERENCES  OF  1878  AND  1881. 

But  the  requirements  of  logic  were  not  applied.  No 
prospect  was  held  out  of  any  active  measures  to  be  adopted 
by  England  in  pursuance  of  the  proposal  of  the  United 
States. 

2.  The  attitude  of  the  English  representatives  at  the 
Monetary  Conference  of  1881. 

The  attitude  of  Mr.  Fremantle,  Sir  Louis  Mallet,  and 
Lord  Eeay  was  an  advance  beyond  this  position.  Al- 
though promising  no  further  change  in  the  local  sytem 
of  Great  Britain  than  the  acceptance  of  silver  as  a 
deposit  for  Bank  of  England  notes  up  to  the  limit  of  exist- 
ing statute,  to  which  was  added  for  India  the  maintenance 
of  free  coinage  of  rupees,  the  recognition  of  the  interest  of 
the  Empire  in  the  policy  now  proposed  by  two  Great  Powers 
was  made  more  clearly  and  more  strongly.  An  analogous 
admission  was  contained  in  an  offer  of  co-operation  from 
Germany,  which  had  closed  its  sales  of  melted  thalers  in 
1879,  and  had  accepted  the  invitation  to  the  Conference. 
But  the  co-operation  offered  by  England  and  by  Germany 
was  not  held  sufficient  to  warrant  the  United  States  and 
France  in  opening  their  mints.  As  a  sequel  the  silver 
question  was  left  at  England's  door.  It  was  plain  that 
under  no  circumstances  could  the  accession  of  Germany 
offer  so  important  a  consideration  to  France  and  the 
United  States  to  induce  them  to  establish  concurrent  free 
coinage  of  silver,  as  the  accession  of  England  ;  and  at  the 
same  time  it  was  probable  that  Germany's  adhesion  would 
follow  that  of  England. 


22  THE    ENGLISH    SILVER    MOVEMENT. 

3.   The  work  of  agitation  and  education  in  England. 

France  and  the  United  States  not  finding  that  the  situa- 
tion warranted  them  in  restoring  silver  mintage,  it  became 
incumbent  upon  those  interested  to  set  on  foot  in  England 
a  work  of  education  and  agitation  which  should  at  length 
secure  the  desired  change  in  her  policy.  The  International 
Monetary  Standard  Association  (Bimetallic  League)  in 
England,  and  likewise  the  Internationale  Doppel-Waeh- 
rungs  herein  in  Germany,  were  founded  in  the  interval 
between  the  adjournment  of  the  Conference  of  1881  and 
the  date  of  its  intended  re-convocation  in  1882. 

Of  their  labors — through  the  press,  by  tracts  and  lec- 
tures, public  meetings,  and  the  rest — I  will  not  attempt  to 
give  here  a  detailed  account.  Suffice  it  to  say,  that  since 
1 882  a  work  of  education  and  agitation  has  been  carried  on ; 
that  public-spirited  men  have  been  rallying  to  the  cause 
from  time  to  time ;  while  the  doctrine  of  monetary  union 
and  parity  of  the  money-metals,  has  been  preached  in  the 
high-ways  and  bye- ways.  In  the  meantime  the  evils  which 
we  had  prophesied  have  been  descending,  chiefly  upon 
England,  and  have  given  cumulative  force  to  the  teachings 
of  reformers. 

I  may  conveniently  mention  here  a  measure  *  of  external 
strategy  which  has  been  amply  urged  as  efficacious  for  the 
ripening  of  conviction  in  England,  namely,  that  the  Ameri- 

*  Stoppage  at  a  future  date,  in  case  Europe  should  refuse  to  come  to 
terms,  was  embodied  in  the  Senate  amendment  to  the  House  Trade-Dollar 
Bill,  reported  by  Mr.  Morrill  for  the  Senate  Finance  Committee  in  January 
or  February,  1885.  In  the  House  it  formed  the  alternative  measure  with 


AGITATION    AND    EDUCATION.  28 

can  Congress  should  fix  a  limit  of  time  to  the  continued  mint- 
age of  new  dollars.  In  the  never-ending  strife  in  America 
between  those  who  saw  only  the  silver  side  of  the  shield  and 
those  who  saw  only  the  gold  side,  the  merits  of  this  great 
stroke  for  the  cause  of  silver  federation  have  failed  of  prac- 
tical recognition.  But  the  event  has  justified  what  was 
said  in  favor  of  fixing  a  limit. 

The  results  obtained  in  England  to-day — the  present 
strength  of  the  pro-silver  movement  in  England — attest 
the  sagacity  of  the  propositions  urged  upon  Congress. 
The  conviction  that  is  ripening  slowly  under  unfavorable 
conditions,  would  have  ripened  quickly  under  favorable 


which  free  coinage  was  defeated  in  the  spring  of  1886  ;  a  defeat  which 
seems  to  have  operated  as  a  stimulus  to  the  silver  movement  in  England. 
(See  pages  —  and  — .) 

The  history  of  the  silver  debate  in  the  House  in  1886  is  briefly  this :  On 
February  16  Mr.  Eland's  free  coinage  bill,  which  was  supported  by  two 
other  members  of  his  Committee,  was  reported  by  Mr.  James  for  the  Com- 
mittee on  Coinage,  adversely,  "  with  an  expression  of  their  unqualified 
condemnation."  The  bill  was  put  upon  the  calendar,  and  Mr.  Dibble,  of 
South  Carolina,  in  concert  with  the  majority  of  the  Committee  on  Coinage, 
offered  the  following  amendment  as  a  substitute  : 

"That  unless  meantime,  through  concurrent  action  of  the  nations  of 
Europe  with  the  United  States,  silver  be  remonetized  prior  to  July  1, 
1889,  then  and  thereafter  so  much  of  the  act  of  February  28,  1878,  entitled 
'  An  Act  to  authorize  the  coinage  of  the  standard  silver  dollar  and  restore  its 
legal  tender  character,'  as  authorizes  and  directs  the  Secretary  of  the 
Treasury  to  purchase  silver  bullion  and  cause  the  same  to  be  coined,  shall 
be  suspended  until  further  action  by  Congress." 

The  vote  was  taken  April  8,  1886.  It  stood,  on  the  Free  Coinage  Bill, 
nays,  163  ;  yeas,  126  ;  not  voting,  34 :  on  the  Conditional  Limitation 
Bill,  nays,  200  ;  yeas,  84  ;  not  voting,  39. 


24  THE    ENGLISH    SILVER    MOVEMENT. 

conditions,  and  such  favorable  conditions  would  have  been 
provided  by  the  bill  for  Conditional  Suspension  of  the 
Dollar  Coinage,  which  was  supported  by  the  international 
bimetallists  in  Congress  in  1885  and  1886. 

It  would  have  operated  as  the  strongest  pro-silver  meas- 
ure within  the  reach  of  Congress.  Failing  this  reinforce- 
ment the  slow  processes  of  education  and  agitation  in  Eng- 
land were  continued. 

4.  The  Royal  Commission  on  the  Depression  of  Trade  and 
Industry. 

An  overt  public  act  appeared  when  the  Royal  Coin- 
mission  on  the  Depression  of  Trade  and  Industry  was 
appointed  in  1884.  Among  its  members  was  Mr.  Gibbs, 
Director  and  former  Governor  of  the  Bank  of  England, 
Mr.  Goschen's  colleague  at  the  Conference  of  1878,  now 
the  President  of  the  Bimetallic  League.  Its  final  report 
was  made  two  years  later,  in  1886.  In  its  diagnosis  of 
economic  malady  the  disturbance  of  the  money  basis  of 
trade  and  industry  caused  by  the  outlawry  of  silver  in 
divers  nations  was  marked  as  a  region  which  deserved  to 
be  explored  by  a  Special  Commission.  The  report  is  given 
in  the  Appendix. 

5.   The  Royal  Commission  on  Gold  and  Silver. 

Such  a  Special  Commission  was  proposed  to  Parliament, 
and  was  appointed  on  September  6, 1886.  Its  Report  (pre- 
sented November  8, 1888),  based  upon  volumes  of  evidence 
and  exhaustive  study  by  men  of  distinguished  competence, 


THE    COMMISSION    ON    GOLD    AND    SILVER.  25 

is  a  memorable  landmark  in  the  advancement  of  science. 
It  is  an  achievement  of  moral  as  well  as  intellectual  dignity. 
With  it  the  doctrines  which  many  of  its  members  had 
been  wont  to  hear  denounced  as  heresy,  if  not  as  lunacy, 
have  become  admitted  truths  of  monetary  science. 

The  full  extracts  from  the  Report  which  are  given  in 
the  Appendix,  leave  only  for  this  page  the  gist  of  the  con- 
clusions arising  from  this  elaborate  investigation. 

The  outcome  is  a  victory.  The  American  proposals  of 
1878  are  justified  by  the  English  propositions  of  1888. 

Six  of  the  Commissioners  urge  that  Her  Majesty's  Gov- 
ernment call  the  representatives  of  nations  together  to 
offer  concurrent  free  mintage  of  silver  at  a  ratio  to  be 
agreed  upon.  The  other  six  are  not  prepared  for  so  pro- 
nounced and  far-reaching  a  declaration ;  but  the  princi- 
ple of  international  concert  is  admitted,  and  a  goodly 
part  of  the  opinions  subscribed  to  by  Lord  Herschell,  Mr. 
Fiemantle,  Sir  John  Lubbock,  Sir  Thomas  Farrer,  Mr. 
J.  W.  Birch,  and  Leonard  H.  Courtney,  M.  P.,  are  very 
much  at  home  as  part  of  the  platform  of  the  Bimetallic 
League. 

The  following  suggestions  (presented  in  abbreviated  form) 
proceed  from  these  gentlemen  who  are  known  to  the  now 
anxious  partisans  of  anti-silver  laws  as  the  "  gold  men  " 
of  the  Eoval  Commission. 


26  THE   ENGLISH    SILVER    MOVEMENT. 

Negotiations  with  other  countries — §§  135-130. 

It  might  be  worth  while  to  meet  the  great  commercial  na- 
tions on  any  proposal  which  would  lead  to  more  extended 
use  of  silver,  and  so  tend  to  prevent  the  apprehended  fur- 
ther fall  in  its  value,  and  to  keep  its  relation  to  gold  more 
stable  ;  *  *  *  probably  in  the  direction  of  an  agree- 
ment that  each  nation  should  annually  coin  a  certain 
amount  of  silver,  not  necessarily  the  same  in  all  coun- 
tries. It  is  worthy  of  consideration  whether  foreign  gov- 
ernments might  not  be  approached  with  a  view  to  a  larger 
coinage  of  silver  than  at  present,  in  conjunction  with  an 
arrangement  on  the  part  of  India  for  keeping  open  her 
mint,  and  on  the  part  of  the  Bank  of  England,  as  to  a  re- 
serve of  silver. 

Issue  of  small  notes  based  on  Silver — §  137. 

We  think  that  the  best  suggestion  in  relief  of  the  ten- 
sion of  the  existing  situation  is  to  be  found  in  the  issue 
of  small  notes  based  on  silver  as  substitutes  for  the 
half  sovereign.  Twenty-shilling  silver  notes  might  also 
be  issued.  These  would  probably  pass  largely  into  use 
without  any  alteration  of  the  law  of  legal  tender,  and  the 
Bank  might  safely  be  required  to  issue  such  notes  to 
some  fixed  amount,  in  exchange  for  silver  bullion  taken  at 
the  average  market  price  ;  or  upon  conditions  of  retain- 
ing silver  of  equal  nominal  amount.  The  objections  on 
the  part  of  expense,  and  the  danger  of  forgery,  are  met 
by  the  example  of  the  United  States,  where  enormous 
note  circulations  for  small  amounts  is  current. 


PRESENT    AND    FUTURE.  27 

The  Present  Situation. 

It  is  plain  that  the  harvest  of  conversion  in  England 
is  coming  into  sight.  It  is  a  harvest  that  took  a  long  and 
weary  seed-time  after  "a  long  and  weary  breaking  of  the 
ground.  England  has  unfortunately  been  busy  with  other 
things,  and  she  remains  busy.  She  could  not  leave  Ireland 
in  order  to  study  silver  and  gold :  one  might  say  she  could 
not  stop  worrying,  or  worrying  about,  Ireland,  according 
as  one's  sympathies  are  Liberal  or  Tory.  In  less  troubled 
times  she  would  have  been  free  more  quickly  to  learn  new 
truths,  or  rather  to  recognize  old  truths  in  the  garb  which 
new  experience  lends  them,  and  thus  would  not  have 
blocked  the  advance  of  a  reform  of  which  she  is  to  be  the 
chief  beneficiary. 

What  has  been  accomplished  is  indicated  by  the  Depu- 
tation of  May  30th,  and  by  the  demonstration  in  Paris,  of 
which  an  account  has  been  given. 

In  an  appendix  will  be  found  a  list  of  names,  which 
needs  no  comment  as  setting  forth  the  strength  of  the 
English  friends  of  Silver  Federation. 

Their  course  is  complicated  by  the  parallel  advance  into 
public  notice  of  two  other  monetary  questions,  namely, 
the  questions  of  withdrawing  and  recoining  light  gold 
coin,  and  of  issuing  one-pound  notes  (perhaps  'ten-shilling 
and  two-pound  notes). 

The  condition  of  the  gold  coin  has  excited  the  attention 
of  monetary  writers  now  for  many  years.  A  considerable 
proportion  of  the  gold  coin  in  England  is  under-weight. 


28  THE   ENGLISH    SILVER    MOVEMENT. 

According  to  a  rough  approximation  current  in  England, 
sovereigns  lose  two  pence  worth  of  gold  in  ten  years,  which 
is  not  far  from  one  per  cent,  and  there  has  been  no  im- 
portant recoinage  since  1817.  The  half-sovereigns  suffer 
more  in  proportion  from  wear  than  the  sovereigns. 

The  proposal  made  by  Mr.  Lowe  (Lord  Sherbrook)  then 
Chancellor  of  the  Exchequer,  in  1869,  to  cut  down  the  sov- 
ereign about  four  pence,  and  charge  the  deduction  as  seign- 
iorage, was  intended  to  bring  about  assimilation  between 
the  English  and  French  units,  making  the  sovereign  equal 
to  a  twenty-five-franc  piece,  but  the  peculiar  merit  was  no 
doubt  observed,  that  this  measure  would  have  provided 
the  means  of  putting  the  coinage  on  a  uniform  basis. 
The  proposition  was  rejected.  A  few  years  ago  Mr. 
Childers,  as  Chancellor  of  the  Exchequer,  brought  for- 
ward a  plan  of  cutting  down  the  half-sovereign  by  a 
tenth,  making  it  a  gold  token,  and  so  covering  the  expense 
of  a  general  rerninting  by  the  gold  thus  saved. 

This  also  was  rejected. 

The  expectation  has  been  general  that  Mr.  Goschen's 
fame  as  a  financier  is  to  receive  an  added  lustre  by  his 
coping  successfully  with  this  problem,  which  has  foiled 
his  predecessors.  The  special  point  of  query  is,  where  the 
money  is  to  come  from  ?  Among  the  competing  sources 
is  the  issuing  of  silver  tokens,  which  in  1889  gave  the 
difference  between  14.28  (the  weight  of  English  change 
relatively  to  gold)  and  21  to  22,  say  fifty  per  cent.,  as  profit 
to  the  Treasury,  less  expenses.  Another  source  which  has 
been  mentioned  is  a  tax  on  circulating  notes,  which  seems 


PRESENT    AND    FUTURE.  29 

to  imply  that  an  alteration  in  the  law  is  to  be  made,  which 
is  expected  to  go  further  than  merely  withdrawing  the  ex- 
isting prohibition  upon  the  issue  of  notes  by  the  Bank  of 
England  under  five  pounds.  The  way  has,  in  part  at  least, 
been  paved  for  such  change  of  English  policy  by  the  fa- 
vorable experience  of  Scotland,  which  was  allowed  to  main- 
tain its  one  and  two-pound  notes.  Having  greatly  recom- 
mended themselves  there,  they  have,  from  time  to  time, 
been  brought  to  general  attention  as  a  possible  example 
well  worthy  to  be  followed  in  England. 

A  beginning  was  made  with  the  light  gold  coin  by  a  law 
passed  in  June,  1889,  ordering  the  withdrawal  of  gold 
coined  before  the  present  reign,  and  it  has  been  under- 
stood that  large  purchases  of  silver  were  made,  followed 
by  a  considerable  increase  in  the  issue  of  silver  change. 

Public  attention  has  also  been  directed  to  the  question 
whether  half-sovereigns  are  to  be  reissued  or  not ;  that  is 
to  say,  whether  the  melted  gold  is  to  come  forth  in  the 
shape  of  twenty  or  of  ten-shilling  pieces,  a  matter  which 
lies  within  the  control  of  the  Crown.  Such  a  withdrawal 
of  small  gold  would  be  regarded  as  intended  to  make  room 
for  silver. 

It  is  plain  there  is  material  for  a  currency  debate,  if 
Parliament  can  find  time  and  taste  for  it. 

In  the  meantime  no  positive  steps  are  known  to  have 
been  taken  by  the  Government  to  give  practical  sequence 
to  the  proposals  for  concerted  action  of  nations  made  by 
either  wing  of  the  Royal  Commission. 


30  THE    ENGLISH    SILVER    MOVEMENT. 

The  Future. 

The  future  is  in  the  making.  It  depends  on  the  will 
and  upon  the  ability — that  is  to  say,  on  the  knowledge  and 
energy,  the  grasp — of  a  few  men,  and  upon  the  permission 
or  acquiescence  of  many  others. 

Circumstances  favorable  to  success  exist.  The  question 
is,  whether  advantage  will  be  taken  of  them.  That  is  the 
question!  It  is  not  new.  The  circumstances  have  been 
favorable  since  1881.  And  many  opportunities  for  action 
have  occurred  since  then,  of  which  no  use  has  been  made. 
And  the  statute  of  limitations  has  been  running  against  all 
settlement. 

I  am  very  willing  to  believe  this  page  may  find  readers 
to  whom  the  principal  statements  above  made  will  seem 
so  obvious  as  to  be  trivial  and  unnecessary.  To  such  a 
reader  I  have  a  word  to  say  in  explanation  of  them. 

Of  the  many  who  now  wish  well  to  the  project  of 
restoring  silver  to  legal  equality  with  gold,  a  very  large 
number  act,  or  suffer,  under  the  belief  either  that  the  pro- 
ject is  so  sound  and  sensible  that  it  will  "  get  itself  "  adopted, 
or  that  the  unstable  condition  of  the  money  basis  of  the 
property  and  investments  of  mankind  will,  if  left  to  itself, 
provoke  a  crisis  so  disastrous  as  to  make  concurrence  of 
nations  in  remedial  action  an  inevitable  measuie  of  self- 
protection. 

To  those  who  hold  these  views — which  are  exceedingly 
natural  and  utterly  erroneous — the  remarks  which  my 
critic  finds  so  obvious  as  to  be  trivial  and  unnecessary, 


PRESENT    AND    FUTURE.  31 

are  by  no  means  obvious.  On  the  contrary,  their  truth  is 
excluded  by  the  views  of  these  excellent  friends  of  parity 
and  peace. 

And  yet  these  are  the  very  people  whose  support  is 
needed  to  make  the  project  of  restoring  silver  to  its  an- 
cient parity  a  success.  So,  while  the  truths  I  have  stated 
are  not  obvious  to  them,  still  less  are  they  trivial  or  un- 
necessary. On  the  contrary,  they  are  the  truths  most 
necessary  to  be  understood,  to  be  grasped,  to  be  held  with 
the  utmost  vigor  of  conviction. 

If  those  who  are  now  friends  of  the  project  in  the 
United  States  were  only  so  convinced  of  the  truths  first 
above  stated  as  to  be  willing  to  use  their  influence  in 
favor  of  it,  the  project  would  very  speedily  become  a 
reality. 


II. 


A  REVIEW  OF  ANTI-SILVER  ARGUMENTS. 


BEPLY   TO 


MR.  LEVASSEUR  AND  MR.  DU  PUYNODE. 


A  REVIEW  OF  ANTI-SILVER  ARGUMENTS. 


REPLY  TO  ME.  LEVASSEUE  AND  ME.  Du  PUYNODE, 

In   the   Monetary    Congress    of  the    Exposition    in   Paris, 
September  13,  1889.* 

EXPLANATOEY. 

The  following  pages  are  a  translation  from  a  steno- 
graphic report,  in  French,  as  printed  (with  some  trifling 
corrections)  for  the  official  journal  of  the  Congress.  These 
remarks  were  made  in  response  to  a  request,  coming  from 
various  sections,  that  I  should  speak,  and  were  made  not 
only  without  notes  but  with  nothing  which  could  properly 
be  called  preparation. 

If  a  friend  on  the  silver  side  should  reproach  me  for 
neglecting  the  cause  by  not  making  a  set  speech,  I  should 

*  PIEERE-EMILE  LiEVASSEUR  (b.  1828;,  member  of  the  Institute,  Profes- 
sor in  the  College  of  France.  The  list  of  his  financial  and  economic 
works  begins  in  1854,  and  numbers  among  other  important  titles :  The 
Gold  Question  (Paris,  1858).  The  History  of  the  Working  Classes  in  France 
from  CcBsar^s  Conquest  to  the  Revolution  (Paris,  1859). 

MICHEL  GUSTAVE  PARTOUNAU  DU  PUYNODE  (b.  1817),  Doctor  of  Laws,  a 
founder  and  chief  editor  of  the  Journal  des  Economistes,  President  of  the 
Council-General  of  the  Department  of  the  Iiidre.  The  list  of  his  finan- 
cial and  economic  works  begins  in  1843,  and  contains  among  other  impor- 
tant titles:  Money  Credit  and  Taxation  (Paris,  1853),  and  The  Great 
Financial  Crises  of  France  (Paris,  1826. ) 


36  SPEECH    IN    THE    CONGRESS. 

be  able  to  make  good  a  defence  on  the  following  lines, 
which  are  worth  mentioning,  not  for  any  personal  reason, 
but  because  they  may  throw  light  on  some  of  the  ob- 
stacles to  the  success  of  the  federation  project.  In  the 
effort  to  promote  that  project,  in  which  I  have  been 
active  since  it  was  conceived,  the  exposed  and  defence- 
less condition  of  the  cause  in  respect  to  prolixity  has 
often  impressed  me ;  for  even  slight  verbal  excesses  repel 
and  repress,  rather  than  encourage,  the  wished -for  grow- 
ing interest  and  persuasion,  when  one  is  dealing  with 
such  a  subject — which  can  well  be  pictured  as  a  morass 
of  problems,  intersected  by  a  few  safe  paths,  easy  to  walk 
on,  but  also  easy  to  stray  from.  The  work  of  agitation 
and  education  which  has  been  going  on  in  Europe  for  so 
many  years  offers  ample  and  varied  illustration  of  what 
I  mean. 

So  far  as  an  appearance  on  the  platform  at  the  Troca- 
dero  was  concerned,  I  felt  that  my  country's  attitude  as 
to  silver  was  sufficiently  known,  and  that,  personally,  my 
past  services  as  a  founder  and  promoter  of  the  federation 
project  relieved  me  from  the  need  of  saying  much.  My 
contributions  upon  the  subject  are  numerous  and  not  un- 
known to  monetary  students,  while  speeches  in  support  of 
the  policy  which  I  had,  I  believed,  justified  in  187(5,  in  a 
Treatise  on  Silver  and  Gold,  were  made  in  Paris  in  1878 
and  1881,  before  official  delegates  of  nations,  the  majority 
of  whom  were  at  last  in  favor  of  it.  Our  friends  from 
England  and  Germany,  it  appeared  to  me,  were  entitled 
to  the  floor.  This  view,  I  may  add,  I  had  occasion  to  press 


EXPL  AN  ATORY.  3  7 

in  the  proper  quarters  long  in  advance  of  the  meeting  of 
the  Congress. 

Beyond  the  reception  of  reports  from  these  still  delay- 
ing but  expected  allies  in  the  coming  Parity  Federation,  it 
seemed  to  me  that  the  opponents  of  this  policy  should  have 
their  say.  They  should  then  be  fully  met  on  our  side,  face 
to  face,  hand  to  hand,  argument  to  argument — in  reply  >  to 
use  a  term  more  familiar  to  a  lawyer  than  to  a  professor,  and 
with  their  flanks  exposed  under  the  burden  of  proof.  This 
course  I  thought,  under  the  circumstances,  more  suitable 
than  the  academic  procedure,  which  may  be  described  as  a 
series  of  essays  spoken  or  read,  and  perhaps  formally 
directed  against  each  other,  but  in  a  vague  and  incon- 
clusive manner — a  sort  of  parade  charge  through  a  mone- 
tary bog,  after  which  each  party  returns  to  its  own  camp. 

In  preparing  this  translation  to  be  offered  to  the  public 
I  have  in  several  instances  observed  that  there  was  too 
great  condensation  of  statement,  and  hence  I  have  inserted 
in  brackets  a  few  phrases  or  sentences  in  order  to  explain 
by  amplifying. 


38  SPEECH    IN    THE    CONGRESS. 


A  EEVIEW  OF  ANTI-SILVER  ARGUMENTS. 

Mr.  President  and  Gentlemen  : 

I  shall  address  you  very  briefly,  limiting  myself  to  criti- 
cism, partly  from  the  scientific  and  partly  from  a  practical 
point  of  view,  of  the  position  taken  by  speakers  who  are 
opposed,  or  who  believe  themselves  opposed,  to  the  move- 
ment for  the  restoration  of  silver  to  its  former  condition  of 
money  equal  to  gold  ;  equal,  that  is,  before  the  law. 

I  regret  that  Mr.  Levasseur  is  not  here  to-day,  for  I 
desire  particularly  to  indicate  the  great  importance  of 
certain  practical  conclusions  which  he  has  set  forth  and 
defended  here.  Mr.  Levasseur  has  also  told  us  that  to  be 
a  partisan  of  what  is  called  "  the  Single  Gold  Standard," 
is  not  a  certificate  of  old  age ;  there  are  still  young  men  as 
well  as  old  men  who  are  in  favor  of  it.  He  also  observed 
that  there  is  a  great  difference  of  opinion  on  this  topic, 
and  he  sought  to. investigate  the  source  of  this  difference. 
It  appears  to  me,  however,  that  he  has  not  noticed  the 
true  cause.  The  true  cause  is  this,  that  there  was  an  ortho- 
doxy, and  that  this  form  of  religion  is  disappearing,  or, 
rather,  transforming  itself  into  a  new  orthodoxy. 

We  respect  the  economists  of  the  past.  Eleven  years 
ago,  gentlemen,  I  crossed  the  sea  to  bring  you  the  pro- 
posals of  the  United  States — proposals  for  a  Monetary 
Federation — based  upon  the  principle  of  Union  which 


THE    POLICY    OF    UNION.  39 

had  been  consecrated  by  the  consent  of  all  the  econ- 
omists of  France  and  of  other  countries.  These  propo- 
sitions have  been  discussed  here  before  you  during  some 
days,  by  Englishmen,  by  Germans,  by  Hollanders,  who 
have  expressed  their  adhesion  to  them.  The  funda- 
mental difference  between  the  new  principle  and  the  old 
is  this  :  we  think  that  the  accord  of  monetary  laws  should 
relate  to  the  material  and  not  to  the  form.  The  Monetary 
Unions  known  to  the  past  have  dealt  chiefly  with  the 
coins,  the  mintage,  the  stamp  ;  and  the  material  of  which 
money  is  made  has  been  a  little  neglected.  We  came, 
therefore,  not  as  innovators,  but  merely,  as  it  were,  to 
propose  an  amendment,  and  ask  for  it  the  support  of 
economists  who  had  already  given  their  adhesion  to  the 
principle  of  Monetary  Union. 

You  see,  gentlemen,  it  is  perfectly  natural,  this  differ- 
ence of  opinion  of  which  the  Honorable  Mr.  Levasseur  has 
spoken  ;  there  are  economists  who  propose  an  amend- 
ment of  science,  and  to  obtain  its  acceptance — of  course, 
that  takes  time. 

But  we,  who  have  desired  for  so  long  a  time  that  you, 
who  are  opposed  to  us,  should  accept  an  amendment  of 
monetary  science,  we  have  the  right  to  recall  to  your 
minds  that  it  is  not  probable  that  monetary  science  should 
remain  without  improvement,  without  growth.  We  have 
asked  you  to  understand  us.  Gentlemen,  I  do  not  wish 
to  speak  ill  of  any  one  ;  I  have  no  idea  of  making  an  at- 
tack upon  friends  who  are  here,  and  mst  together  in  an 
international  reunion.  But  I  pray  you  to  accept  from 


40  SPEECH    IN   THE    CONGRESS. 

me  a  complaint.  You  have  not  yet  done  us  the  honor 
fully  to  understand  our  propositions,  and  it  is  for  that 
reason  that  you  are  here  to  oppose  the  pro-silver  move- 
ment in  England  and  in  Germany,  of  which  these  gentle- 
men have  spoken. 

I  beg  you  to  observe,  gentlemen,  that  the  thing  we  are 
speaking  of  is  practical  in  its  nature.  I  ask  those  gen- 
tlemen who  have  spoken,  and  those  who  are  about  to 
speak ;  I  ask  Mr.  Passy  *  and  others  who  are  to  address 
you  :  Give  us  the  reasons  why  England  should  not  ac- 
cept the  proposition  to  form  a  Monetary  Alliance  with 
France.  [Applause.] 

If  you  can  show  that  monetary  union  is  not  a  good  policy. 
I  beg  you  to  do  so.  But  I  will  say  this  to  you,  if  it  is 
not  a  good  thing  that  Paris  or  France  should  have  a  stabJe 
parity  of  money  with  London,  with  Calcutta,  with  San 
Francisco,  with  Buenos  Ayres,  then  demonstrate,  I  pray 
you,  why  it  is  a  good  thing  that  Paris  should  have  a  stable 
parity  of  money  with  Marseilles,  with  Bordeaux,  and  with 
Calais.  [Applause.] 

There  is  the  point !  This  is  a  practical  matter,  gentle- 
men. We  are  not  here  for  the  purpose  of  making  aca- 
demic eulogies  on  certain  doctrines  of  science  ;  it  is  with 
a  view  to  action,  to  results,  with  a  practical  object,  that  we 
desire  to  compare  our  ideas. 

I  have  complained,  gentlemen,  that  our  adversaries 
have  not  yet  done  us  the  honor  of  understanding  us.  I 

*  FREDERIC  PASSY  (b.  1822),  member  of  the  Institute  of  France,  Deputy. 
The  list  of  his  economic  and  political  works  begins  in  1856. 


THE    LAWS    OF    THE    MARKET.  41 

assure  you  that  the  divergency  that  exists  between  our 
opinions  can  be  harmonized,  if  our  adversaries  will  do  us 
this  honor.  For  us,  gentlemen,  it  is  necessary  to  under- 
stand your  position,  your  opinions.  If  we  cannot  do 
that  we  can  have  no  hope  of  persuading  you.  We  began 
with  the  study  of  the  opinions  you  share,  and  it  was  be- 
cause we  understood  them  that  we  have  been  able  to  add 
the  corrections  of  which  I  have  spoken. 

I  now  allow  myself,  gentlemen,  to  call  attention  to  certain 
remarks  which  fell  from  speakers  who  have  preceded  me 
to-day.  There  is  an  order  of  fact  and  opinion,  the  signi- 
ficance of  which  was  indicated  by  the  honorable  gentle- 
man who  has  just  spoken,  Mr.  Du  Puynode,  in  referring 
to  the  two  metals  as  subject  to  the  laws  of  the  market.  I 
adopt  for  a  moment  the  language  used  by  the  distin- 
guished speaker  ;  I  also  say  they  are  in  the  market.  But 
I  ask,  what  market  ?  I  aver  that  it  is  a  market  in  which 
a  decision  of  the  English  Parliament  can  determine  the 
position  of  a  metal.  Mr.  Du  Puynode  cannot  deny  that. 
It  is  impossible.  Everyone  knows  that  if  the  English 
Parliament  passes  a  law,  a  law  for  gold  money  in  England, 
or  a  law  for  silver  money  in  England,  it  will  be  gold  in 
one  case,  or  silver  in  the  other ;  that  will  be  money  in 
England.  The  market  we  are  in,  then,  is  a  market  in 
which  great  nations  are,  so  to  speak,  buyers. 

Very  well,  we  are  here  to  say,  or  rather  these  English 
and  German  representatives  are  here  to  say,  after  the  invi- 
tation of  France  and  the  United  States  (1881)  :  Yes,  we 
are  ready  that  our  countries  respectively  shall  enter  tliia 


42  SPEECH    IN    THE    CONGRESS. 

market  as  buyers,  and  we  know  that  if  we  do  so,  if  these 
nations  combine,  they  can  fix  the  relative  importance  of 
gold  and  silver.  There  are  no  other  nations  that  have  the 
power  to  neutralize  what  these  nations  shall  determine. 

I  shall  now  ask  you,  gentlemen,  to  consider  for  a  mo- 
ment the  origin  of  these  ideas  on  the  "  single  gold  stand- 
ard," which  have  been  set  forth  by  speakers  who  are  among 
the  partisans  of  this  metal.  What  is  the  source,  what  is,  so 
to  speak,  the  history  of  the  evolution  of  this  theory  ? 

My  researches  into  the  history  of  monetary  policy*  have 
enabled  me  to  ascertain  that  in  the  past,  in  most  nations, 
the  system  of  money  was  4this  :  There  was  a  principal 
money  and  a  secondary  money.  Everywhere  throughout 

the  world  there  was  the  "single  standard,"  if  you  desire  to 

X. 

call  it  so,  of  silver,  and  another  "  standard,"  but  a  second- 
ary one,  of  gold.  [There  was,  therefore,  a  combined  single 
and  dual  standard.] 

From  the  legislative  point  of  view  silver  was  superior, 
gold  the  inferior.  This  is  the  system  of  money  which  has 
continued  down  to  our  century. 

Mr.  Du   Puynode  has  cited  to   you,  and,  I  believe,  Mr. 

*  The  statements  of  historical  facts  given  in  this  and  following  pages, 
which  are  at  variance  with  the  hitherto  accepted  versions  of  history,  are 
set  forth,  and  I  believe,  justified  in  "  Historical  Material,"  aud  "  Contri- 
butions to  the  Study  of  Monetary  Policy,"  in  the  Document  of  the 
Monetary  Conference  of  1878  (Washington,  1879),  and  in  "The  Silver 
Pound  and  England's  Monetary  Policy  since  the  Restoration  "  (London: 
Macmillan  &  Co.,  1887),  copies  of  which  works  were  distributed  to  mem- 
bers of  the  Congress  through  the  hands  of  MM.  Guillaumin  &  Co.,  pub- 
lishers, 14  Rue  Richelieu,  Paris. 


LOCKE    AND    NEWTON.  43 

Mannequin  and  another  of  our  speakers,  have  cited  to  you, 
a  great  work  of  Lord  Liverpool.*  Now,  Lord  Liverpool 
thought  he  could  transfer,  from  silver  to  gold,  this  posi- 
tion of  legal  superiority.  But  he  was  not  an  enemy  of 
silver.  His  propositions  embraced  free  coinage  of  silver  in 
England. 

Mr.  Mannequin  has  cited  to  you  the  names  of  Locke 
and  Newton.  But  they  were  as  much  in  favor  of  two 
money  metals  as  we  are.  This  has  been  proved.  I  shall 
have  the  honor  of  bringing  to  your  attention  manuscripts 
of  Newton,  which  I  discovered  in  the  Archives  in  Lon- 
don, and  also  a  report  of  Locke  which  had  not  been  gen- 
erally known,  all  of  which  I  published  two  years  ago.| 
It  is  now  proven  that  for  Locke  and  for  Newton  and  for 
all  the  elder  English  authorities  the  true  system  was  a  sys- 
tem of  money  made  of  the  two  metals,  the  one  superior, 
the  other  in  a  legal  position,  so  far  as  the  thought,  the  in- 
tention of  the  legislature  was  concerned,  a  little  inferior— 
that  is  all. 

And  now  I  pray  you,  gentlemen,  to  glance  (in  passing) 
at  the  practical  importance,  for  our  question  of  the  origin 
of  the  theory  of  the  single  gold  standard,  of  the  fact  that 
we  have  here  to-day  the  representatives  of  public  opinion 
in  England  [to  tell  us  that  conversion  in  favor  of  silver  is 
proceeding  in  the  home  and  native  soil  of  that  erroneous 
doctrine]. 

*  A  Treatise  on  the  Coins  of  the  Realm  in  a  letter  to  the  King.     London. 
1805. 
t  See  preceding  note,  page  42. 


44  SPEECH    IN    THE    CONGRESS. 

Eleven  years  ago,  during  the  Monetary  Conference  of 
1878,  I  had  the  great  pleasure  of  making  the  acquaint- 
ance of  Michel  Chevalier,*  to  whom  I  was  presented  by 
M.  de  Parieu.  Chevalier  spoke  to  me  of  the  object  of 
the  Conference,  and  said  words  which  remain  and  always 


*  MICHEL  CHEVALIER  (b.  1806,  d.  1879),  member  of  the  Institute  of 
France.  He  was  seat,  in  1833,  by  Mr.  Thiers,  to  study  the  methods  of 
transportation  in  the  United  States.  He  published  Letters  on  North 
America  (2  vols.,  Paris,  1836);  Material  Interests  of  France,  Public 
Works,  Roads,  Canals,  Railways  (Paris,  1838)  ;  History  and  Description  of 
Modes  of  Transportation  in  the  United  States  (Paris,  1840).  In  1840  he 
succeeded  Rossi  as  Professor  of  Political  Economy  in  the  College  of 
France.  Among  his  numerous  succeeding  works  I  mention  here  his 
Treatisa  on  Money,  the  first  thorough  and  comprehensive  work  on  the 
subject,  and  his  Probable  Fall  of  Gold  (Paris,  1859),  which  was  translated 
and  reprinted  in  England  by  Cobden.  He  was  made  member  of  the 
Academy  of  Moral  and  Political  Sciences  in  1851 ;  was  Counsellor  of  State 
under  the  Empire;  a  Deputy,  and  Senator. 

I  have  always  regarded  him  as  the  controlling  spirit  in  the  monetary 
thought  of  his  time,  and  as  the  chief  spiritual  progenitor  of  the  decisions 
of  the  International  Monetary  Conference  of  1867,  and  hence  of  the  Anti- 
Silver  Movement. 

The  saying  of  Chevalier,  above  quoted,  seemed  to  me  the  symptom  of 
an  admission  extending  to  the  innermost  core  of  the  subject ;  the  admis- 
sion, namely,  that  if  we  succeeded  in  one  way  we  should  succeed  in  the 
other ;  that  if  England  should  join  with  the  other  nations,  the  parity  of 
the  metals  would  be  maintained — the  contrary  of  which  opinion  still 
plays  its  part  as  a  tenet ;  it  is  not  yet  dislodged  entirely  from  the  convic- 
tions of  the  learned.  Reference  wiil  be  found  to  this  point  on  a  later 
page. 

The  present  representatives  of  the  Chevalier  tradition  in  France,  the 
gentlemen  who  addressed  the  Congress  on  the  anti-silver  side  in  such 
force,  including  the  accomplished  young  journalists  who  acted  as  its  Sec- 
retaries, illustrate  the  persistence  of  the  mathematician's  idea  of  the 


THE    SINGLE    STAND AKD.  45 

will  remain  in  my  memory  :  "  You  will  never  succeed  in 
converting  England" 

There,  gentlemen,  is  the  basis  of  the  opinion  of  all  those 
who  oppose  this  movement  for  the  restoration  of  silver, 
which  is  now  going  on  in  England  and  Germany.  France 
and  the  United  States,  as  you  are  aware,  were  gained  long 
ago.  The  main  support  of  the  opinions  of  those  who 
oppose  us,  is  still  and  always  England,  and  it  is  because 
it  was  believed  to  be  descended  from  ancestors  so  worthy 
of  respect  as  Locke  and  Newton  that  this  idea,  opinion, 
or  theory  of  the  Single  Gold  "  Standard  " — an  idea  which 
belongs  properly  to  mathematical  sciences — has  been  ac- 
cepted in  political  and  economic  science. 

Gentlemen,  look  about  a  little,  if  you  will,  and  consider 
what  is  your  idea.  Everyone  makes  his  ideas  for  him- 
self. What  is  your  idea  of  a  "  standard  "  ?  It  is  a  weight, 

"  standard,"  to  which  I  have  referred  on  pages  45  to  47.  The  same 
remnrk  would  be  justified  by  the  existing  opinion  in  academic  circles 
in  other  European  capitals,  though  such  opinion  makes  itself  heard 
chiefly  when  attack  is  made  upon  the  existing  primacy  of  gold,  which  is 
de  facto  the  established  "  standard"  of  Christendom,  that  is  to  say,  privi- 
leged by  law  and  by  administrative  regulation  in  Europe  and  America  as 
the  ruling  money,  freely  coinable  and  receivable  everywhere.  In  each 
country  the  gold  party  is  still  in  some  measure  inspired  with  faith  in  its 
metrical  and  mathematical  concept  ;' standard"  (etaloii),  which  it  adopted 
from  the  exact  sciences  iu  the  course  of  the  long-continued  agitation  for 
perfecting  and  unifying  weights,  measures,  and  units. 

I  may  here  appropriately  observe  that  if  Michel  Chevalier  had  not  be- 
gun life  as  an  engineer — with  an  engineer's  confidence  in  physical  weights, 
measures,  and  units — the  monetary  history  of  his  time  might  have  been  a 
very  different  one. 


46  SPEECH    IN    THE    CONGRESS. 

says  one.  Very  well,  put  it  in  a  glass  case  where  we  keep 
standards  of  weight.  No,  no  ;  that  is  not  all.  This  weight 
is  circulating  through  the  country.  Then  in  the  case  of 
money  the  weight  is  not  everything.  But  where  is  the 
"  standard,"  gentlemen,  where  is  the  "  standard,"  if  it  is 
in  the  pockets  of  the  people,  and  if  it  is  a  weight  ?  I  beg 
you,  gentlemen,  to  make  an  effort  to  give  substance,  to  rep- 
resent in  its  reality,  your  idea  of  a  "  standard,"  and  you 
will  see  there  is  something  wrong  in  it. 

[You  cannot  with  impunity  predicate  of  values  that  qual- 
ity of  physical  fixity  and  invariableness  which  the  word 
'"  standard "  represents,  by  reason  of  its  general  applica- 
tion to  the  constants  with  which  science  measures  space, 
time,  matter,  and  force.] 

There  is  money,  gentlemen — what  is  money  by  law. 
Talk  of  that  and  I  understand  you,  and  I  care  very  little 
what  you  say  of  a  "  standard." 

Very  well ;  this  theory  of  the  single  standard  made  of 
gold  took  its  rise  in  this  way.  There  was  a  misunder- 
standing—  that  is  all  —  a  misunderstanding  about  the 
former  "  constitution  of  money,"  which  was,  as  I  have  ex- 
plained, silver  as  principal  money,  gold  as  secondary 
money,  but  both  of  them  money,  and  both  fully  money ; 
the  difference  in  their  rank  being  a  difference  in  the  intent 
of  the  legislator,  not  in  their  employment  by  the  people. 
Rights  of  coinage  an'd  legal  tender  power  were  the  same. 
But,  in  the  plan  of  the  legislator,  the  basis  of  the  sys- 
tem was  silver.  If  it  should  become  necessary  to  change 
the  ratio,  then  it  was  the  gold  coin  whose  weight  must  be 


THE    SINGLE    STANDARD. 

increased  or  diminished.  That  was  the  legal  difference 
between  the  two  kinds  of  money.  Here,  then,  was  the 
misunderstanding  [a  confusion  of  concepts,  an  exaggera- 
tion, you  see,  of  the  legal  theory  of  unity  at  the  ex- 
pense of  the  facts,  the  actual  and  lawful  duality],  and 
it  was  believed  that  the  authority  of  Newton  and  Locke 
and  of  other  guiding  spirits  made  for  this  [exaggera- 
tion which  ignored  the  fact,  for  a]  theory,  or  rather  for  a 
definition — a  tendency  of  opinion  about  money — which 
belongs  rather  to  the  physical  sciences  than  to  political 
economy. 

Based  upon  this  error  came  the  prestige  of  the  United 
Kingdom    to   fortify  it  ;    the   fact  that  the   laws  of  this 
great  people,  the  people  most  advanced  and  best  known 
in  the  world  of  international  trade — the  chief  maritime 
nation — gave  a  marked  preference  and  privilege  to  gold 
money.     The  law  for  free  coinage  of  silver  still  existed  on 
the  statute  book,  but  it  had  not  been  put  in  force.     Well, 
the  prestige  of  the.  English  system  impressed  itself  upon 
general   opinion ;    nothing    occurred  to    disturb    the    im- 
pression ;  and  when  the  great  agitation  for  the  improve- 
ment of  Aveights  and  measures  and  units  [that  is,  of  real 
"  standards  "]  came,  there  was  this  error  about  the  nature 
of  money  at  the  foundation  [of  the  general  opinion  of  the 
learned  in  these  matters],  and  the  experience  and  the  au- 
thority of  the  United   Kingdom   sustaining  it.     Thus  it 
came  to  pass  that  the  mathematician's  enthusiasm,  enthu-  ' 
siasm  for  the  metric  system,  misled  economists  [and  states- 
men]   into  the  disastrous   path   Avhich  the  International 


48  SPEECH    IN    THE    CONGRESS. 

Conference  of  1867  recommended — the  effort  to  abolish 
silver  money. 

Here,  gentlemen,  you  see  the  origin  of  opinions  which 
still — even  to-day — have  maintained  a  certain  influence. 

But,  gentlemen,  before  leaving  the  tribune  I  allow  my- 
self the  pleasure  of  noting  that,  after  all,  the  opposition  in 
France  on  the  part  of  the  masters,  the  professors  of  science, 
does  not  amount  to  very  much — 

MEMBERS.   [Oh!  Oh!] 

Mr.  HOETON. — According  to  the  opinion  of  Mr.  Levas- 
seur ! 

This  is  not  merely  my  opinion,  gentlemen ;  it  is  the 
opinion  of  Mr.  Levasseur ;  for  he  has  proposed  to  you  the 
free  coinage  of  silver. 

A  MEMBER.  But  under  what  conditions ! 

Mr.  HORTON.  I  will  tell  you  the  conditions.  I  regret 
that  Mr.  Levasseur  is  not  here. 

The  PRESIDENT.  He  was  obliged  to  leave  Paris  this  morn- 
ing. He  asked  me  yesterday  to  present  his  regrets  to  the 
Congress.  It  was  my  forgetfulness  that  prevented  my  do- 
ing so. 

Mr.  HORTON.  You  wrere  all  here ;  you  all  heard  Mr. 
Levasseur.  According  to  what  I  heard,  he  was  for  the 
free  coinage  of  silver,  at  the  market  rate,  was  it  not  ? 

MEMBERS.   [Yes !  Yes !] 

The  SECRETARY,  Mr.  COSTE.  That  is  to  say,  that  before 
coining  a  five-franc  piece  he  Avould  want  not  merely  silver 
-enough  to  coin  it,  but  a  third  more. 


ME.    LEV  ASSE  UK'S    PLAN.  49 

A  MEMBER.  They  would  have  to  begin  again  when  the 
rate  changed.* 


*  NOTE.— The  member  who  said  this  was  in  error  as  to  Mr.  Levasseur's 
proposition,  at  least  unless  both  myself  and  Mr.  Coste  are  wrong.  "Be- 
ginning again  when  the  rate  changes  "  implies  what  Americans  have  known 
as  the  "  cart-wheel  dollar  " — the  effort  to  coin  a  dollar  "  with  silver  enough 
in  it  to  make  it  equal  to  a  gold  dollar."  To  do  this  it  would  be  necessary 
to  change  the  weight  (and  perhaps  to  recoin  the  existing  stock)  whenever 
a  change  should  come  in  the  gold  price  of  silver. 

The  effect  of  Mr.  Levasseur's  proposition  would  be— so  at  least  I 
understood  it  aud  explained  it  at  the  time  to  some  of  his  friends, — 
that  the  Government  would  buy  all  the  silver  that  should  be  offered  to 
it,  and  pay  in  five-franc  pieces.  In  self-defence  it  would  be  obliged  to 
coin  up  the  bullion.  To  maintain  its  silver  coin  at  par  with  gold  would 
be  necessary  for  self-preservation,  and  hence  it  could  tolerate  no  discrim- 
ination against  silver  coin. 

The  Government  must  therefore  use  silver  coin  on  the  same  terms  with 
gold  in  its  own  transactions.  In  that  case  there  would  be,  de  facto,  unlim- 
ited legal  tender  for  silver,  so  far  as  such  transactions  are  concerned.  In 
presence  of  such  an  arrangement,  with  this  avenue  for  use  wide  open,  the 
little  fence  set  up  on  the  side  of  compulsory  legal  tender  (limiting  it  to 
1000  or  500  francs)  would  be  of  no  avail.  The  limitation  would  be  nulli- 
fied in  practice,  even  if  it  were  not  repealed  out  of  hand. 

So,  as  I  said  in  the  above  lines,  What  difference  would  it  make? 

I  may  usefully  recall  here  that  the  vocabulary  of  money  is  very  deficient 
in  the  means  of  clear  thinking  and  precision  of  statement  on  these  heads  ; 
and  French,  which  expresses  "legal  tender"  by  "liberatory  force,"  or 
"power,"  is  no  better  off. 

I  have  endeavored  to  reinforce  the  plain  English  of  monetary  talk  (which 
is  not  yet  plain  enough),  by  introducing  the  word  "partial" — partial  legal 
tender— in  the  special  sense  of  money  which,  in  certain  quarters,  is  legally 
receivable  without  limit.  With  us,  for  example,  the  national  bank 
notes  and  silver  certificates  ai-e  partial  legal  tender,  being  receivable  for 
public  dues. 


50  SPEECH    IN    THE    CONGKESS. 

Mr.  HORTON.  Mr.  Levasseur  gave  a  great  many  argu- 
ments ;  he  was  very  eloquent ;  I  remember  with  pleasure 
that  he  said  many  brilliant  things,  and  that  they  were 
aimed  at  us,  and  all  was  very  well  said  ;  but  at  the  end,  he 
proposed  the  free  coinage  of  silver. 

The  SECRETARY,  Mr.  COSTE.  Permit  me  to  say  that  Mr. 
Levasseur  added  that  the  silver  coin  should  have  its  legal 
tender  limited  to  500  francs. 

Mr.  HORTON.  Five  hundred  francs,  or  1,000  francs,  or 
something  like  that. 

The  SECRETARY.  It  was  I  who,  in  first  addressing  the 
Congress,  took  occasion  to  point  out  that  it  ought  not  to 
go  beyond  1,000  francs,  and  in  fact  that  the  legal  tender 
power  should  not  be  so  high,  but  Mr.  Levasseur  indicated 
500  francs  as  the  limit. 

Mr.  HORTON.  According  to  my  remembrance  he  spoke 
of  500  francs,  but  he  also  spoke  of  1,000  francs,  and  added 
at  the  end,  "  something  like  that." 

But  what  difference  does  it  make  ?  If  all  the  opposition 
which  exists  against  the  movement  in  England  and  Ger- 
many, the  object  of  which  is  to  persuade  these  nations 
or  governments  to  ally  themselves  with  France  and  the 
United  States — if  all  this  opposition,  I  say,  melts  down 
and  disappears  in  a  proposition  like  that  of  Mr.  Levas- 
seur, I  have  great  pleasure  in  assuring  my  friends  from 
England  and  Germany  that  we  need  have  little  solicitude 
for  the  future.  If  these  gentlemen  who  are  opposed  to 
us  are  of  that  way  of  thinking,  they  are  on  the  right  track  ; 


MR.  LEVASSEUR'S  PLAN.  51 

they  have   made   good  progress  ;  they  are  at  last  coming 
over  to  be  our  friends  and  to  stand  by  our  side. 

These  gentlemen  from  England  have  come  here  on  the 
invitation  of  the  Direction  of  the  Exposition  ;  they  have 
given  a  report  on  the  progress  which  has  been  made  since 
the  silver  question  was  left,  so  to  speak,  at  England's  door, 
at  the  close  of  the  Conference  of  1881  and  1882  ;  and  these 
other  gentlemen  have  come  from  Germany  for  a  similar 
object.  They  are  curious  to  see  if  the  men  of  science  who 
are  here  assembled  can  say  anything  to  convince  them 
that  they  are  wrong ;  that  they  must  turn  back,  retrace 
their  steps,  and  abjure  their  opinions. 

Well,  gentlemen,  when  the  practical  outcome  of  a  dis- 
course so  eloquent  as  that  of  Mr.  Levasseur  is  the  free 
coinage  of  silver,  I  assure  you  we  are  very  near  a  general 
agreement. 

Mr.  FREDERIC  PASSY.  It  is  not  free  coinage  at  the  rate 
of  151. 

Mr.  HORTOX.  A  word  more !  The  honorable  Mr.  Du 
Puynode,  who  has  spoken  of  England  as  the  native  land 
of  the  single  gold  standard,  also  added  some  words  of  en- 
couragement as  to  the  condition  of  England  in  these  late 
years.  One  would  suppose — that  is,  if  I  heard  him 
rightly — that  there  had  been  no  "  hard  times  "*  there. 

Mr.  Du  PUYNODE.  I  said  there  had  been  hard  times, 
but  that  the  crisis  has  passed  for  England. 

Mr.  HORTON.  If  the  crisis  has  passed  we  are  all  re- 
joiced, are  we  not? 


*  Crise. 


52  SPEECH    IN   THE    CONGRESS. 

But  what  I  wish  to  point  out  to  you  is  this  :  the  prac- 
tical question  for  this  assembly  is  to  know  whether  the 
outlawry  of  silver  has  been  an  efficient  cause  of  hard  times 
in  the  past.  If  that  is  the  fact,  the  thing  to  do  is  to  pre- 
vent the  outlawry  of  silver  in  the  future.  [Applause.] 

Well,  on  this  question,  I  have  heard  nothing,  and  yet  it 
is  the  chief  practical  question.  We  are  not  here  to  inquire 
if  we  are  feeling  well.  [Laughter.]  We  want  to  know  if 
there  is  something  to  be  done  to  ward  off  any  disease  that 
is  in  the  air.  [Applause.] 

Now,  gentlemen,  I  have  one  word  to  add  touching  the 
attitude  of  those  who  defend  the  outlawry  of  silver.  I 
point  out  to  you  that  the  very  existence  of  their  opinions 
to-day  is  due  to  the  fact  that  their  propositions  were  not 
adopted.  The  demonetization  of  silver  ! — we  can  use  the 
words  if  we  wish — but  the  great  fact,  the  important  fact,  is 
that  the  demonetization  of  silver  did  not  take  place  ;  the 
movement  was  checked,  and  it  went  no  further. 

If  that  movement  had  gone  on  we  should  have  witnessed 
a  different  state  of  affairs — [we  should  have  witnessed  dis- 
asters far  beyond  all  that  has  oppressed  mankind  since 
1873.]  This  is  what  we  wish  to  explain,  and  what  the 
speakers  who  oppose  the  restoration  of  silver  ought  to  be 
denying.  But  they  cannot  do  this. 

The  sale  of  melted  silver  dollars  in  Germany  was  closed 
ten  years  ago.  Gentlemen,  if  you  wish  to  get  to  the  root 
of  this  question — I  give  you  notice  of  this  because  we 
expect  you  to  do  so,  to  recognize  the  significance  of  the 
issue  which  our  friends  from  England  and  Germany  have 


THE   POLICY    OF    DISUNION.  53 

put  before  you — ask  for  yourselves,  or  let  us  ask  you  to 
tell  us,  what  would  have  been  the  result  if  the  French 
dollars*  which  we  had  the  pleasure  of  inspecting  this 
morning  in  the  Bank  of  France,  had  been  sold  ? 

There  is  the  point ;  the  point  about  which  jou  should 
take  sides.  Your  advice  is  asked  ;  people  wish  to  know 
whether  you  are  in  favor  of  demonetizing  silver.  If  you 
are  not  in  favor  of  it,  we  beg  you  to  say  so — Mr.  Levas- 
seur  has  already  done  this — and  we  ask  all  speakers  who 
are  opposed  to  the  silver  movement  in  England  and  Ger- 
many to  tell  us  what  ground  they  would  have  taken  if  such 
a  sale  had  occurred,  and  what  would  happen  if  they  should 
succeed  in  inducing  the  governments  to  undertake  a  gen- 
eral attack  against  silver. 

I  thank  the  assembly  for  its  kindly  reception.  [Ap- 
plause.] 

*  1,250,000,000  francs'  worth  in  5-franc  pieces. 


III. 

QUESTIONS 

OF 

THE   EOYAL    COMMISSION 

ON 

GOLD  AND  SILVER, 

AND 

ANSWERS. 


55 


PKEFATOKY. 

The  following  letter  and  enclosure  gave  the  occasion 
and  motive  for  preparing  these  pages  : 

GOLD  AND  SILVER  COMMISSION, 
8,  EICHMOND  TERRACE,  LONDON, 

August,  1887. 

SIR  :  The  Commission  appointed  by  Her  Majesty's  Gov- 
ernment in  the  course  of  last  year  to  investigate  the  re- 
cent changes  in  the  relative  values  of  the  precious  metals 
have  made  some  progress  with  their  inquiry,  and  have  taken 
a  considerable  body  of  evidence  from  persons  in  this 
country  ;  but  they  feel  that  they  would  have  imperfectly 
discharged  the  duty  imposed  upon  them  if  they  had  not 
had  recourse  to  some  of  the  many  competent  authorities 
on  the  subject  who  reside  in  foreign  countries. 

It  is,  however,  obviously  impossible  to  elicit  the  views 
of  these  gentlemen  by  the  usual  method  of  oral  examina- 
tion, and  the  Commission  have  therefore  drawn  up  the 
enclosed  paper  of  questions,  comprising  the  more  im- 
portant points  on  which  they  are  anxious  to  obtain  the 
opinion  of  those  who  have  studied  the  subject. 

Should  you  feel  disposed  to  assist  the  Commission  in 
this  way,  they  would  be  very  much  obliged  if  you  would 
favor  them  with  written  answers  to  any  or  all  of  these 
questions. 

If,  however,  you  are  unable,  for  any  reason,  to  comply 
with  the  invitation  of  the  Commission,  they  desire  me  to 
convey  to  you  their  apologies  for  having  ventured  to 
trouble  you  with  this  letter. 

57 


58  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

I  forward  under  another  cover  a  copy  of  the  First  Re- 
port of  the  Commission,  which  has  been  recently  issued. 
I  have  the  honor  to  be,  sir,  your  obedient  servant, 

(Signed)  GEO.  H.  MURRAY, 

Secretary  to  tJie  Commission. 

To  Mr.  8.  DANA  HORTON. 

The  above  circular  letter  was  sent  to  a  limited  number 
of  persons  in  different  countries,  and  replies,  to  the  num- 
ber of  eight  I  believe,  including  the  replies  of  the  Hon. 
David  A.  Wells  and  the  following,  were  printed  in  the  ap- 
pendices of  the  Commission's  Report. 

The  enclosure  is  as  follows  : 

QUESTIONS. 

1.  To  what  do  you  attribute  the  fall  in  the  value  of  sil- 
ver, as  compared  with  gold^  since  1874  f 

2.  What  probability  is  there  of  a  continuance  of  the  fall  f 

3.  To   what  do  you  attribute  the  fall  in  the  wholesale 
prices  of  many  commodities  which  has  been  in  progress 
during  the  last  10  or  12  years  f 

4.  Has  it  extended  to  (&)  retail  prices  (b),  wages  and  other 
payments  for  services  rendered  (c),  land  and  houses  f 


THE  QUESTIONS.  51) 

5.  Has  the  fall  resulted  in  any  material  prejudice  to  the 
commercial  or  general  interests  of  the  world  f 

6.  Do  you  consider  that  the  countries  using  the    gold 
standard,,  or  any  of  them,  are  suffering  from  an  injurious 
contraction  of  the  currency  which  might  have  been  obviated 
or  mitigated  by  an  increase  in  the  supply  of  gold  f 

7.  To  what  extent  and  in  what  way  are  prices  affected  by 
the  quantity  of  the  metal  or  metals  used  as  standards  of 
value  f 

8.  What  is  the   relation,  if  any,  between  the  supply  or 
quantity  of  the   precious  metals  and   the  fluctuations  of 
credit  f 

9.  Has  there  been  during  the  last  15  years  any  important 
development  of  the  system  of  cheques,  bank  credits,  bills  of 
exchange,    or  other  means  of  economizing   the  use  of  the 
precious  metals  f 

10.  Do   you  consider   that    an  international  agreement 
could  be  made  for  the  free  coinage  of  gold  and  silver  as 
legal  tender  money  at  a  fixed  ratio  f 

11.  Is  it  in  the  power  of  Governments  to  maintain  such 
a  ratio  if  agreed  upon;  and  would  the  practice  of  the  com, 
mercial  world  follow  the  law  f 


60  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

12.  What  would  be  the  effect  of  such  an   agreement,  if 
carried  out,  upon  (a)  prices,  and  (b)  the  production  of  the 
precious  metals  f 

13.  Do  you  consider  an  international  agreement  for  bi- 
metallism possible  on  any  other  ratio  than 


14.  Failing  an  international  bimetallic  agreement,  what 
measures  could  be  adopted  by  the  commercial  nations  of  the 
world  for  giving  increased  stability  to  the  relation  between 
gold  and  silver  f 

15.  It  is  argued  that,  in  the  absence  of  bimetallism,  the 
effect  of  any  disturbance  of  the  currency  is  limited  to  half 
the  currencies  of  the  world,  and  thereby  increased  in  inten- 
sity.    Do  you  consider  this  view  correct;  and,  if  so,  do 
you  think  the  evil  a  serious  one  f 

16.  If  the  effect  of  such  disturbances  could  be  spread  all 
over  all  countries,  would  greater  stability  of  the  standard 
of  value  be  secured  thereby  f 


QUESTIONS    OF    THE    ROYAL    COMMISSION  ON 
GOLD  AND  SILVER 


ANSWERS. 


I. 

QUESTION  I. 

To  what  do  you  attribute  the  fall  in  the  value  of  silver, 
as  compared  witJi  gold,  since  1874:  f 

DEFINITION  (relating  also  to  other  QUESTIONS). 

The  form  of  the  QUESTION  "  to  what  do  you  attribute  " 
a  certain  phenomenon  ?  opens  a  wide  field.  It  brings  into 
view  the  entire  range  of  elements  which  have  combined 
their  influence  to  produce  the  phenomenon :  and  the 
temptation  arises  in  answering  the  question  either  to  con- 
template with  indifference  both  causes  and  conditions,  or 
fail  to  recognize  the  restraints  upon  freedom  of  choice 
among  them.  In  a  certain  sense  each  of  these  regions  is 
a  little  world  in  itself,  for  there  is  an  endless  multiplicity 
of  factors  distributed  in  time  and  space,  without  the  con- 
current existence  of  which  the  monetary  situation  could 
not  have  been  exactly  what  it  is.  For  the  purpose  of 
gaining  any  useful  generalization  as  to  that  situation,  the 
range  of  view  must  be  limited  to  the  causes  and  condi- 
tions that  are  close  at  hand,  and  they  must  be  distin- 
guished, the  controllable  forces  must  be  recognized  as 
such,  the  subject  looked  at  in  mass  and  in  perspective. 

61 


62  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

These  observations,  however  obvious  and  common- 
place, would  be  germane  if  it  were  for  a  purpose  purely 
scientific  that  the  labors  of  the  ROYAL  COMMISSION  were 
undertaken  ;  if  it  were  merely  an  Economic  Academy 
gradually  accumulating  the  materials  for  an  exhaustive 
Dictionary  or  Cyclopaedia  of  Monetary  Science.  This 
however  is  not  understood  to  be  its  character.  However 
important  the  contribution  which  it  makes  to  the  knowl- 
edge of  monetary  economy,  its  function  is  primarily  a  prac- 
tical one,  that  of  a  Special  Council  of  State,  its  function 
as  a  scientific  body  being  tributary  to  its  function  as  a 
political  body.  Its  members,  deliberating  upon  the  reme- 
dies of  existing  evils  and  the  means  of  preventing  future 
^vils,  are  to  act  by  recommendations,  positive  or  negative, 
^  expressing  themselves  favorably  or  unfavorably,  upon  a 
proposal  to  modify  English  monetary  laws  ;  and  are,  at  the 
same  time,  to  exert  an  influence,  favorable  or  unfavorable, 
upon  the  prospect  of  the  adoption  of  modifications  of  their 
laws  by  the  legislatures  of  other  nations,  an  influence 
which  cannot  fail  seriously  to  affect  British  interests.  The 
point  of  view  of  the  ROYAL  COMMISSION  is,  then,  really  that 
of  the  learned  law-giver  at  the  moment  of  decision,  or  of 
drafting  a  decree.  Although  it  deals  with  a  subject  pre- 
senting many  problems  unsolved  or  insoluble,  its  object  is 
to  act ;  as  a  council  of  astronomers  would  reform  a  calen- 
dar, or  select  a  meridian,  without  determining  the  chemis- 
try of  the  sun,  or  completing  a  catalogue  of  the  stars. 

In  so  far  as  the  ROYAL  COMMISSION  shall  affect  legisla- 
tion,— whether  positively  or  negatively,  passively  or  ac- 


THE  TASK  OF  THE  ROYAL  COMMISSION.       63 

tively,  by  leaving  things  as  they  are,  or  by  suggesting 
change, — it  directs  the  will  of  nations  for  good  or  for  ill. 
Its  choice  between  the  two  paths  which  lie  before  it  must 
mark  a  turning-point  in  history.  The  paths  are  well  dis- 
tinguished ;  for  a  decade  of  controversy  has  been  explor- 
ing these  fields  of  thought,  and  all  mankind  have  an  interest 
in  the  decision.  Further  light  is  to  be  thrown  upon  the 
questions  :  Has  the  general  outlawry  of  silver  money  pend- 
ing since  1873,  been  beneficial  to  England  ? — Will  the 
restoration  of  silver  to  permanent  monetary  equality  with 
gold  by  joint  action  of  nations  be  beneficial  to  England  ? — 
questions  upon  which  England  gave  some  answer  before 
the  nations  in  the  International  Monetary  Conferences  of 
1878  and  of  1881.  Impetus  will  be  given  to  decision  of 
the  questions  :  Shall  England  promote  Monetary  Union  or 
Monetary  Disunion  ? — Shall  England  aid  in  giving  stability 
or  instability  to  the  foundation  of  the  valuations  of  man- 
kind ? 

To  deal  with  these  issues  is  the  gist  of  the  mandate  of 
the  ROYAL  COMMISSION. 

The  course  of  definition,  then,  which  I  am  now  seeking 
to  present, — that  which,  with  a  view  to  action,  would  in- 
sure a  grasp  of  the  situation  as  a  whole, — is  the  course 
which  the  COMMISSION  takes  in  order  to  fulfil  its  trust,  to 
"  rise  to  the  height  of  its  great  argument."  Hence,  one  who 
seeks  to  give  answer  to  the  QUESTIONS  of  the  COMMISSION 
will  do  well  to  regard  the  same  perspective  in  his  replies, 
as  far  as  his  vision  may  reach.  But  to  do  this,  and  to 
guaranty  thorough  understanding  of  these  replies  on  the 


64  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

part  of  a  reader,  they  must  be  seen  and  be  shown  in  their 
relations ;  it  is  necessary  not  only  to  declare  the  stand- 
point, but  to  define  it  with  particularity.  To  this  end,  a 
certain  energy  of  precision  is  required,  to  overcome  an 
existing  tendency  toward  confusion,  an  opaqueness  of  the 
very  atmosphere  by  which  all  readers  of  the  day  are  sur- 
rounded. There  is  an  omnipresent  never-resting  pressure, 
a  momentum  of  opinion,  a  gravitation  of  interest,  which 
resists  an  adequate  recognition  of  the  obvious  truths 
heretofore  set  forth,  and  which  therefore  calls  for  a  cor- 
responding energy  in  their  vindication.  I  do  not  here 
refer  merely  to  the  well-known  obscurity  and  difficulty  of 
the  subject — by  reason  of  which  the  questions  of  the 
ROYAL  COMMISSION,  though  brief  in  themselves,  would 
need  a  volume  for  exhaustively  explicit  treatment — but  to 
a  peculiar  tendency  toward  error  in  the  minds  of  many 
men  of  learning,  the  nature  and  origin  of  which  is  given 
by  the  following  facts  : 

These  anti-silver  laws,  whose  effects  the  EOYAL  COMMIS- 
SION is  called  upon  to  study,  were  not  adopted  without 
deliberation.  The  advice  of  counsel  was  taken,  men  of 
action  submitted  to  men  of  thought,  and  the  advising 
counsel  were  the  learned  of  a  generation.  It  was  the 
general  consensus  of  the  learned  opinion  of  the  time 
which  these  laws  were  intended  to  reflect.  The  republic 
of  monetary  learning,  an  iinperium  in  imperils,  an  eco- 
nomic church  which  respects  no  national  boundaries,  was 
unanimous.  If  believed  in  the  Unification  of  Money — in 
security  of  valuations,  in  simplification  of  the  means  of 


UNION    SOUGHT    AND    DISCORD    GAINED.  65 

exchange,  in  facilitating  international  trade  and  invest- 
ment— an  aim  nobly  in  unison  with  the  progressive  spirit 
of  an  age  whose  glory  it  is  already  to  have  made  giant 
strides  in  this  direction,  by  putting  nature's  forces  in  har- 
ness, as  well  as  by  cultivating  the  faculties  of  men.  This 
was  the  aim,  the  object,  the  end.  What  could  be  more 
worthy  ? 

But  of  the  means  to  attain  this  end  what  account  is  to 
be  given  ?  What  was  this  means  ?  The  outlawry  of 
silver,  the  legislative  or  administrative  exclusion  of  silver 
from  legal  privileges  hitherto  enjoyed  equally  with  gold. 
Did  this  tend  toward  the  Unification  of  Money  and  the 
benefits  it  was  to  bring  in  its  train  ?  This  is  one  phase  of 
the  subject  before  the  ROYAL  COMMISSION.  In  considering 
it,  there  are  at  least  two  hypotheses  that  must  be  enter- 
tained, namely,  either  that  this  repeal  of  laws  equalizing  the 
metals  wras  wise,  or  it  was  unwise.  The  inquiry  can  hardly 
be  carried  on  without  entertaining  these  two  suppositions. 
If  the  latter  supposition,  which  I  aver  to  be  true,  be  dis- 
passionately examined  with  some  deliberation,  it  will 
appear  that  it  entails  precisely  the  conclusions  as  to  the 
present  confused  state  of  monetary  learning  to  which  I 
have  referred.  It  must  be  assumed  then  that,  in  the  field 
of  action,  lay  error.  The  means  was  not  only  inadequate 
for  its  special  end,  sacrificing  substance  to  shadows,  but 
was  disastrous  in  the  wider  field  of  its  influence. 

Failing,  however,  to  perceive  all  this  in  advance,  the 
learned  world  was  betrayed  into  acting  as  sponsor  of  a 
mistaken  scheme  of  Unification,  accessory  before  the  fact, 


66  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

aider  and  abetter  in  the  great  overt  acts  of  the  anti-silver 
movement,  the  anti-silver  laws  of  Germany,  which  were 
followed  in  natural  sequence  by  the  anti-silver  laws  of 
other  states.  The  event  is  unique,  without  precedent. 
For  the  first  time  in  history  has  a  theory  of  the  closet 
been  so  abruptly  transformed  into  jus  gentium,  the  law 
common  to  the  nations.  How  far,  then,  did  the  inter- 
preters of  science  feel  themselves  committed  to  justify  the 
correctness  of  their  practical  suggestions  ?  How  far  did 
they  recognize  the  means  which  they  had  suggested  to 
attain  an  end,  as  merely  tentative,  as  an  experiment,  as 
the  object  of  scientific  curiosity  rather  than  of  partisan 
attachment  ?  Did  they  feel  themselves  committed  to  the 
error  as  well  to  the  truth,  to  the  mistaken  means,  as  well 
as  to  the  justified  end  ? 

The  question  is  of  decisive  practical  importance. 

Certainly  the  average  man  would  naturally  regard  them 
as  so  committed,  and,  human  nature  being  in  full  opera- 
tion, it  is  quite  plain  that  it  required  a  certain  rare  eleva- 
tion of  spirit,  for  one  who  had  borne  a  part  in  the  anti- 
silver  movement,  to  grant  access  to  his  mind  for  that 
course  of  study  of  the  practical  working  of  the  change 
wrought  by  anti-silver  laws,  which  showed  he  had  been 
in  the  wrong.  Beside  this  the  mere  momentum  of  ac- 
complished facts,  the  complexity  and  obscurity  of  the 
subject,  made  such  study  an  effort  which  could  not  fail 
to  be  unwelcome,  and  would  easily  seem  to  be  unnecessary. 
To  whatever  extent,  then,  economists  failed  to  support  a 
new  and  heavy  burden  of  learning  and  of  unlearning,  an 


ADMISSION    OF    A    GREAT    MISTAKE.  67 

unique  array  of  forces  was  summoned  to  defend  error. 
Conviction  must  take  time,  and  until  it  becomes  general, 
fallacious  doctrine  must  here  and  there  be  flourishing 
under  the  shadow  of  authority,  an  abnormal  atmosphere  of 
monetary  opinion  must  obscure,  refract,  or  distort  the  image 
of  truth.  It  is  then,  quite  in  the  natural  order  of  events 
that  mighty  forces  should  be  at  work  to  prevent  recogni- 
tion of  the  truth  as  to  the  questions  before  the  COMMIS- 
SION ;  a  resistance  for  which  the  vitality  of  a  race,  or  of  a 
religion,  alone  affords  adequate  parallel. 

To  prove  this  steadiness  of  pressure,  the  very  existence 
of  the  ROYAL  COMMISSION  is  itself  a  witness.  It  was  com- 
missioned in  1886  to  perform  a  task,  a  goodly  part  of 
which  a  SPECIAL  COMMITTEE  of  the  HOUSE  of  COMMONS, 
appointed  in  1876,  might,  could  and,  —  it  may  be  argued, 
—  should,  have  performed.  Ten  years  of  the  life  of  a 
generation,  a  goodly  fraction  of  the  most  active  years  of 
the  XIX  century,  are  thus,  in  a  certain  sense,  a  measure 
of  these  forces. 

For  whatever  obstacles  to  conviction  and  bent  toward 
fallacy  there  may  be,  the  special  subject  now  considered 
supplies  outwork  and  bulwarks  and  fortress  and  the  very 
inner  and  final  citadel  of  strength.  One  may  say,  indeed 
the  very  configuration  of  the  ground  combines  the  natural 
advantages  for  the  defence  of  error. 

It  is,  upon  final  analysis,  the  free  will  of  men  which 
affords  the  staple  of  discussion,  but  the  free  will  of  men 
moving  as  it  were,  in  two  distinct  masses,  the  one  belong- 
ing to  the  individual  acting  separately,  the  other  to  the 


68  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

organized  will  of  the  community,  the  state,  acting  through 
governments.  The  difficulties  of  adequate  distinction  be- 
tween the  two  orders  of  volition,  of  assigning  its  true  place 
to  each,  offer  amplest  field  for  a  confusion  which  must 
surely  tend  to  obscure  the  duty  of  statesmanship,  whose 
task  consists  in  overcoming  inertia,  in  stimulus  and  direc- 
tion and  control  of  the  will  of  nations.  Thus  the  mere 
enthusiasm  of  the  votary  of  science — making  "  better  the 
enemy  of  good,"  as  the  French  phrase  has  it — may  tend, 
by  delaying  action,  to  defeat  the  true  object  of  inquiry. 

It  is  with  a  view  to  these  various  considerations  that  the 
present  response  to  the  invitation  of  the  COMMISSION  is 
conceived  ;  and  in  order,  as  far  as  may  be,  to  guard  against 
misapprehensions  which  may  naturally  arise,  I  have  pre- 
sented laconic  replies  surrounded,  as  it  were,  with  signals 
of  definition  and  explanation. 

ANSWER. 

I  attribute  the  fall  in  the  value  of  silver  as  compared 
with  gold,  to  anti-silver  laws  and  governmental  regulations, 
in  the  western  nations. 

EXPLANATION. 

Throughout  the  entire  pendency  of  the  breach  of  parity 
between  silver  and  gold,  the  opinion  has  been  currently 
expressed,  that  this  fall  is  attributable  to  certain  other 
alleged  causes,  which  are  hereinafter  set  forth. 

(A.)  A  Preference  for  gold  or  antipathy  to  silver. 

The  error  of  this  view  consists  (1),  in  an  erroneous  in- 


ANSWER    AND    EXPLANATION.  69 

terpretation  of  the  word  "  cause,"  or  (2),  in  a  misapprehen- 
sion touching  the  practical  operations  of  business,  the  use 
of  money. 

(1.)  The  word  "cause"  is  used  to  designate  the  motives 
which  led  the  individual  rulers  of  Germany  to  establish 
gold,  and  reject  silver,  money,  and  of  France  to  check  the 
rate  of  silver  mintage,  etc.,  and  it  is  assumed  that  prefer- 
ence for  gold  and  antipathy  to  silver  are  an  adequate  char- 
acterization of  these  motives.  Without  stopping  to  inquire 
whether  this  characterization  is  correct  it  is  sufficient  to 
point  out  that  it  is  irrelevant.  What  we  are  concerned 
with  is  a  deed,  an  act,  not  an  opinion,  or  intention,  just  as 
in  a  surgeon's  diagnosis  of  a  gunshot  wound  it  is  indifferent 
whether  the  shot  was  fired  intentionally  or  by  accident. 

(2.)  A  field  of  importance  is,  in  imagination,  opened  to 
this  "  preference  for  gold,"  by  flatly  ignoring  the  most  obvi- 
ous facts  about  the  uses  of  money  and  the  nature  of  the 
institution  of  money.  The  exertions  of  the  visionary  in 
the  defence  of  anti-silver  laws  have  offered  a  parallel  to 
the  speculations  of  the  mediaeval  schoolmen.  There  is  no 
lack  of  opinions  on  money  which  are  explicable  only  on 
the  ground  that  their  authors  are  ignorant  of  the  existence 
of  laws  of  Legal  Tender,  Coinage,  Banking,  etc.,  or  imagine 
that,  if  there  are  such  things,  they  are  of  no  effect,  that  the 
citizen  pays  no  attention  to  them,  acting  exactly  as  he 
would  act  if  there  were  no  such  laws.  As  is  usual  in  case 
of  delusion,  the  sense  of  humor  here  shines  by  its  absence, 
for  these  products  of  a  sophisticated  imagination  exist  for 
the  special  purpose  of  defending  nothing  less  than  actual 


70  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

laws  of  Legal  Tender  and  Coinage, — anti-silver  laws,  gold- 
favoring  laws, — to  which  their  advocates  ascribe  great  effi- 
cacy. 

(B.)  The  slightly  increased  production  of  silver  from  the 
mines  has  been  regarded  as  a  cause. 

(C.)  Certain  special  instances  of  a  reduction  of  the  em- 
ployment for  silver,  which  are  familiar  to  the  COMMISSION, 
have  been  treated  as  a  cause. 

The  error  of  B.  and  C.  lies  in  treating  as  paramount 
and  efficient  a  factor  whose  influence  is  only  ancillary  and 
subordinate.  While  the  slightly  increased  output  of  sil- 
ver, and  the  India  Council  Bills,  etc.,  exerted  a  depressing 
influence  on  the  market  ratio  of  silver  to  gold,  yet  they 
were  only  enabled  to  do  so  by  anti-silver  laws. 

But  for  these  laws  they  would  have  had  no  effect. 
Their  effect  is  thus  a  part  of  the  effect  produced  by  the 
anti-silver  laws,  hence  they  are  not  entitled  to  be  regarded 
as  a  cause  of  the  fall,  in  the  proper  sense  of  the  words. 
That  these  points  are  so  often  ignored  is  due  to  the  con- 
fusion analyzed  in  the  DEFINITION.  I  am  not  aware  that 
the  facts  have  been  categorically  disputed.  To  disprove 
my  point,  it  would  be  necessary  to  maintain  that  if  the 
Mints  of  Germany,  Holland,  France,  Belgium,  etc.,  and  of 
the  United  States,  had  remained  open  to  free  coinage  of 
silver,  gold  would  still  have  risen  above  the  French  par  in 
silver,  by  reason  of  Nevada's  silver  product  and  India's 
payments  in  London  ;  an  opinion  which  is  obviously  erro- 
neous. 


THE   FUTURE    OF    SILVER.  71 

II. 

QUESTION  II. 

What  probability  is  there  of  a  continuance  of  the  fall  ? 
ANSWER. 

The  chief  element  in  the  calculation  of  this  probability 
is  necessarily  the  action  of  governments,  and  the  action  of 
governments  will  presumably  be  affected  to  an  important 
extent  by  the  action  of  the  ROYAL  COMMISSION. 

To  discuss  the  probable  action  of  the  United  States,  of 
Germany,  of  France,  or  of  other  Powers,  without  reference 
to  the  alternative  possibilities  of  a  decision  on  the  part  of 
the  British-Indian  Empire,  a  decision  which,  in  its  prelimi- 
nary form  of  a  Report  of  the  ROYAL  COMMISSION,  is  regarded 
as  impending,  would  be  futile.  In  estimating  the  impor- 
tance of  this  decision,  from  the  international  point  of  view, 
essential  data  are  embodied  in  the  conclusions  of  the  two 
International  Monetary  Conferences  called  to  discuss  the 
proposal  of  a  concurrent  regulation  of  the  legal  position 
of  the  money  metals. 

In  the  Conference  of  1878,  called  by  the  United  States, 
in  which  Germany  was  not  represented,  the  delegates  of 
the  other  principal  Powers  united  in  a  declaration  recog- 
nizing "  that  it  is  necessary  to  maintain  in  the  world  the 
monetary  functions  of  silver  as  well  as  of  gold."  In  the 
Conference  of  1881,  called  by  France  and  the  United 
States,  the  attitude  of  representatives  of  the  British-Indian 
Empire  and  of  the  German  Empire,  the  chief  Powers 


72  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

whose  adhesion  to  the  programme  of  concurrent  action  was 
withheld,  nevertheless  respectively  recognized  an  interest 
in  the  carrying-out  of  that  programme,  offering  certain 
measures  to  be  adopted  within  their  respective  jurisdic- 
tions as  a  contribution  to  its  success. 

To  whatever  extent,  then,  this  action  of  the  two  Powers 
can  be  held  to  have  any  binding  effect,  the  question  of 
principle,  touching  the  main  issue  within  the  considera- 
tion of  the  EOYAL  COMMISSION,  was  admitted,  and  the  issue 
was  narrowed  to  the  question  of  amount,  How  much  these 
Powers  were  respectively  prepared  to  do  in  order  to  bring 
about  a  settlement  of  the  existing  conflict  of  Coinage 
Systems. 

The  quota  of  co-operation  actually  offered  not  having 
been  looked  upon  by  other  nations  as  sufficient,  a  long 
period  of  monetary  inaction,  so  far  as  modifications  of 
monetary  laws  are  concerned,  has  followed,  which  seems 
to  imply  an  expectant  attitude,  looking  especially  to  a 
new  departure  on  the  part  of  Great  Britain. 

III. 
QUESTION  III. 

To  what  do  you  attribute  the  fall  in  the  wholesale  prices 
of  many  commodities  which  has  been  in  progress  during  the 
last  10  or  12  years. 

DEFINITION.     See  QUESTION  I. 

ANSWEE. 

I  attribute  the  general  fall  of   prices  to  the  anti-silver 


THE    APPRECIATION    OF    GOLD.  73 

laws  and  regulations  adopted  and  carried  out  in  various 
states  since  1871  ;  but  this  assertion  cannot  properly  be 
held  to  imply  necessarily  that  if  there  had  been  no  anti- 
silver  laws  there  would  have  been  no  fall  of  prices,  nor 
that  there  would  have  been  a  rise  of  prices.  No  prob- 
abilities of  this  kind  can  be  laid  down  with  precision  of 
detail.  But  from  the  point  of  view  of  the  legislator, 
responsible  for  the  action  of  the  state,  and  treating  the 
action  of  individuals,  in  all  the  minutiae  of  processes 
of  production  and  distribution,  as  merely  giving  the 
conditions  amid  which  he  is  to  act, — it  is  sufficient 
to  say  with  certainty  that  if  there  had  been  no  anti- 
silver  laws  the  fall  of  prices  might  not  have  occurred, 
and  that  the  greater  part  of  that  fall  could  not  have 
occurred.  Whatever  doubt  may  be  justified  in  the 
matter,  the  opposition  to  the  outlawry  of  silver  is  entitled 
to  the  benefit  of  the  doubt ;  the  presumptions  are  against 
the  outlawry  of  silver.  They  are  likewise  in  favor  of  its 
being  set  aside  now. 


EXPLANATION. 

Among  the  current  explanations  of  the  general  fall  of 
prices  (or  appreciation  of  gold,  which  is  only  another 
mode  of  describing  the  same  event)  prominence  is  often 
given  to  certain  notable  features  of  modern  economic  life ; 
namely,  new  inventions,  improved  means  of  transit,  trans- 
port, and  communication,  new  methods  of  business,  etc., 
all  tending  to  lessen  the  labor  of  production.  It  is  there- 


74  QUESTIONS    OF    THE   EOYAL    COMMISSION. 

fore  important  to  ascertain  what  place  is  to  be  given  to 
these  elements  of  the  situation. 

Referring  to  the  considerations  presented  in  the  defini- 
nition  of  QUESTION  I,  I  first  observed  that  these  elements, 
from  the  standpoint  of  monetary  policy,  occupy  at  best 
an  inferior  and  subordinate  place,  as  affording  merely  the 
conditions  with  reference  to  which  the  legislator  has  to  act. 
If  the  tendency  of  their  influence  upon  prices  is  down- 
ward, and  thus  to  produce  an  injurious  rise  in  the  pur- 
chasing power  of  money,  the  business  of  the  legislator  is, 
if  possible,  to  counteract  this  tendency,  and  if,  as  has  been 
stated,  the  maintenance  of  silver  in  parity  with  gold  would 
have  this  result  in  any  important  degree,  then  the  practi- 
cal question  is  decided  in  favor  of  silver.  The  same  re- 
sponse applies  to  the  reasoning,  that  sometimes  attains 
currency,  about  overproduction,  which  should  rather  be 
named  under-consumption. 

But  the  anti-silver  argument  based  upon  new  in- 
ventions and  improved  methods  is  not  content  with 
elevating  conditions  into  causes.  It  goes  further.  It  is 
in  substance  maintained — sometimes  in  specious,  vague, 
or  confusing  language — that  because  new  inventions  and 
improved  methods  are  economic  benefits,  therefore  the  fall 
of  prices  is  an  economic  benefit.  Here  lies  the  real 
strength,  because  here  lies  the  seductiveness  of  the  argu- 
ment. In  essence,  this  reasoning  is  merely  a  resolute  beg- 
ging of  the  question,  and  puts  the  cart  before  the  horse. 
This  will  be  apparent  from  the  following  analysis. 

If  a  general  fall  of  prices,  or  rise  in  the  value  of  money. 


SOPHISMS  ABOUT  APPRECIATION  OF  GOLD.     75- 

is  an  evil  at  all,  it  is  an  evil  because  it  is  a  derangement  of 
the  terms  of  existing  investments  and  obligations,  and  a 
derangement  peculiarly  unfortunate  ;  being  more  injurious 
in  proportion  than  its  complement,  a  fall  in  the  value  of 
money,  because  it  disturbs  the  adjustment  of  the  machinery 
of  business  and  so  checks  the  normal  growth  of  enterprise. 
Evidently  no  peculiarity  of  origin  of  the  rise  in  the  value 
of  money  can  divest  it  of  this  latter  character ;  it  must  be 
a  derangement,  no  matter  how  it  comes  to  pass.  To  deny, 
then,  that  such  a  dislocation  of  values  is  an  evil  at  all  is 
an  obvious  error.  It  implies,  in  fact,  the  impossible  opin- 
ions that  it  is  not  desirable  that  money  should  remain 
stable  in  value,  and  that  "  hard  times  "  are  not  an  evil. 
From  this  it  is  but  a  short  step  to  affirm  that  it  is  the  busi 
ness  of  statesmanship  to  prevent  prosperity !  . 

We  proceed  to  consider  the  argument  which  defends 
this  evil,  as  a  price,  so  to  speak,  paid  in  order  to  secure 
the  admitted  economic  benefits  of  new  inventions  and  im- 
proved methods,  and  therefore  more  than  made  good  by 
the  profits  of  the  operation. 

The  illusions  embodied  in  this  view-  will,  I  think,  be  dis- 
closed by  the  following  analysis.  "What  is  the  difference 
of  effect  between  an  invention  that  does  not  lower  prices 
at  all — to  imagine  an  extreme  case — and  an  invention 
which  lowers  them?  Does  it  not  consist  in  this,  that  in 
the  latter  case  it  is  (what  economic  science  knows  as)  "  the 
consumer  "  who  has  the  gain,  which  in  the  former  case 
would  go  to  "  the  producer  ?"  Can  there  be  any  doubt 
that  the  admitted  benefits  of  new  inventions  and  of  im- 


76  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

proved  methods  can  be  obtained  without  paying  such  a 
price,  so  ruinous  a  price,  as  a  general  rise  in  the  value  of 
money  ?  There  should  be  no  doubt.  It  is  not  necessary, — 
it  never  was  (strictly)  necessary, — to  pay  this  price.  (See 
0,  page  82.) 

That  this  truth  is  left  out  of  sight  is  probably  due  to  an 
exaggeration  of  the  importance  of  the  new  inventions  and 
improved  methods  which  have  come  into  play  since  1873. 
Offering,  as  they  do,  the  strongest,  because  most  seductive, 
argument  to  defend  the  anti-silver  laws  from  the  charge 
of  having  produced  a  ruinous  dislocation  of  values,  so 
much  has  been  said  about  these  new  inventions  and  methods 
since  1873,  that  men  forget  what  happened  before  1873  ; 
and  forgetting  what  happened  before  1873,  they  ignore 
what  might  have  happened  since  1873  but  for  these  same 
anti-silver  laws. 

Before  1873,  a  marvellous  development  of  "  cheapen- 
ing r'  inventions  and  methods  took  place,  while  there  was 
no  fall  of  prices,  and  also  during  periods  when  there  was  a 
rise  of  prices.  Why  could  not  the  same  experience  be 
repeated  ?  Evidently  it  would  have  been  repeated  after 
1873,  if  the  conditions  of  quantity  (parity.  See  Def.  of 
Q.  YI)  had  been  maintained  by  a  proper  course  of  mon- 
€bary  legislation.  The  entire  plea  of  new  inventions  and 
new  methods  is  thus  put  out  of  court. 

It  remains  to  consider  some  special  points  which  have 
been  relied  upon  to  excite  sympathy  for  this  plea.  Spe- 
cial reasons  are  alleged  why  a  fall  of  prices  is  a  benefit  : 
namely  that  it  tends  to  improve  the  relative  position  of 


WAGES    AND    THE    UNEMPLOYED.  77 

the  manual-labor  classes.  'If  this  entry  to  its  credit  were 
correct  (in  certain  cases),  it  would  be  more  important, 
than  it  is,  to  note  that  the  debit  entries  are  also  to  be 
taken  into  consideration  ;  that  the  annual  return  for 
manual  labor  is  not  to  be  ascertained  by  multiplying  an 
average  of  daily  wages  by  300,  but  is  a  question  of  fact 
to  be  proved  by  testimony,  in  which  the  number  of  "  un- 
employed," the  regularity  and  certainty  of  work  for  the 
employed,  would  come  under  examination. 

But  the  credit  entry  is  not  correct.  This  entry  is  not 
to  be  made  correct  by  the  mere  observation  that  the  pro- 
ductiveness of  work,  in  obtaining  satisfaction  of  his  needs 
for  the  worker,  has  actually  increased  of  late  years.  To 
rely  upon  this  observation  is  to  reveal  confidence  in  a 
false  issue.  The  true  issue  is  :  Would  the  satisfaction  of 
the  worker  have  been  less,  if  there  had  been  no  anti-silver 
laws  f  I  am  not  advised  that  any  apologist  of  anti-silver 
laws  has  even  tried  to  establish  the  affirmative  of  this  issue. 

IV. 

QUESTION  IV. 

Has  it  extended  to  (a)  retail  prices,  (b)  wages  and  other 
payments  for  services  rendered,  (c)  land  and  houses  f 

ANSWER. 

On  these  subjects  I  have  no  fruits  of  original  research 
to  present,  and  can  therefore  add  nothing  to  the  evidence 
already  before  the  Commission,  unless  by  way  of  analysis 
and  criticism  of  that  evidence. 


78  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

In  a  general  way  an  affirmative  reply  to  QUESTION  IV 
is  indicated  in  the  answers  to  other  QUESTIONS,  and  some 
brief  criticism  is  also  set  forth  touching  certain  inferences 
which  have  been  drawn  from  the  facts  toward  which 
QUESTION  IV  is  directed. 

V. 

QUESTION  V. 

Has  the  full  resulted  in  any  material  prejudice  to  the 
•commercial  or  general  interests  of  the  world  f 

DEFINITION.     See  QUESTION  /. 
ANSWER. 

Yes,  so  far  as  a  vitiated  system  of  money  can  affect 
them.  Of  course  the  respective  degrees  to  which  various 
national  systems  of  money  have  been  so  affected  cannot 
be  stated  with  precision. 

EXPLANATION.     See  also  QUESTION  ///. 

The  general  importance  of  stability  of  average  purchas- 
ing power  and  of  parity  between  monetary  systems  con- 
nected by  trade  or  investment  are  elementary,  rudimen- 
tary, principles  of  monetary  policy  :  very  much  as  the  rule 
of  the  majority  is  an  elementary  principle  of  representa- 
tive bodies. 

These  principles  belong  in  fact  to  the  category  of  defi- 
nitions. It  is  impossible  to  define  good  money  without 
including  the  "  parities  "  which  have  been  violated  in  these 
dislocations  of  values,  and  it  is  impossible  to  define  what 


PARITY    AND    STABILITY.  79 

is  desirable  so  as  to  exclude  what  is  good.  Granted  the 
existence  of  men,  it  is  desirable  that  there  should  be  good 
men,  and  so,  likewise,  granted  that  money  exists,  it  is  de- 
sirable that  it  should  be  good  money. 

Now  to  say  that  the  money  of  Europe  has  been  and  is 
good  money — as  good  money  as  it  would  have  been  if 
there  had  been  no  breach  of  these  parties — is  intrinsically 
absurd,  and  nothing  but  the  confusion  produced  by  the 
causes  analyzed  in  the  DEFINITION  of  QUESTION  I  prevents 
universal  recognition  of  this  absurdity. 

If  the  absence  of  a  certain  par  between  London  and 
Bombay  is  not  a  material  prejudice,  the  absence  of  a  cer- 
tain par  between  London  and  Manchester  is  not  a  mate- 
rial prejudice  ;  if  a  past  fall  of  prices  of  25  per  cent,  is 
not  a  material  prejudice,  a  future  fall  of  25  per  cent,  will 
not  be  a  material  prejudice,  or  50  per  cent,  or  75,  80,  90, 
a  fall  which  would  reduce  the  business  world  to  universal 
bankruptcy  or  repudiation.  So  long  as  human  nature  en- 
dures, men  who  buy  and  sell  will  be  glad  to  know  what 
the  price  is  to  be,  men  who  invest  will  desire  a  return, 
mortgagees  will  desire  that  their  security  shall  be  enough 
to  pay  the  debt,  and  mortgagors  will  desire  to  realize  as 
much  as  possible  from  their  "  equity  of  redemption." 

It  is  upon  the  propriety  and  persistence  of  such  desires 
as  these  in  men,  or  in  other  words,  upon  the  inexpugnable 
basis  of  human  nature,  that  the  affirmative  answer  to 
QUESTION  V  is  based 


80  QUESTIONS    OF    THE    KOYAL    COMMISSION. 

VI. 

QUESTION  VI. 

Do  you  consider  that  the  countries  using  the  gold  stand- 
ard, or  any  of  them,  are  suffering  from  an  injurious  con- 
traction of  the  currency  which  might  have  been  obviated  or 
mitigated  by  an  increase  in  the  supply  of  gold  f 

DEFINITION. 

The  question  is  a  double  question.  The  first  part  re- 
lates to  a  matter  of  fact  :  "  Are  certain  countries,  is  any 
country,  suffering  from  contraction  of  the  currency  ?  " 

The  countries  referred  to  as  "  using  the  gold  standard  " 
use  this  standard  and  from  "  choice,"  but  in  obedience  to 
statutes  which  accord  the  full  rank  of  national  money  to 
gold  alone. 

The  second  part  is  a  matter  of  opinion  :  "  Could  such 
contraction,  if  existing,  have  been  obviated  or  mitigated  by 
an  increase  in  the  supply  of  gold  ?  " 

What  is  the  meaning  of  "  contraction  of  the  currency  ?  " 
The  history  of  the  phrase  is  a  long  one.  Originally  ap- 
plied to  the  various  species  of  Paper  Money,  it  is  only 
lately,  so  far  as  I  am  informed,  that  it  has  been  used  to 
describe  the  event  which  I  assume  the  KOYAL  COMMISSION 
has  in  view,  namely,  a  deficient  supply  of  Metallic  Money. 

The  distinctly  artificial  or  conventional  origin  and  char- 
acter of  Paper  Money,  which  is  admittedly  a  product  of 
law  and  of  governmental  action,  and  the  "quantity"  of 
which  is  subject  to  governmental  control,  import  distinc- 


THE    MEANING    OF    CONTRACTION.  81 

tions  which  are  of  vital  importance  in  defining  the  new 
meaning  of  the  phrase. 

Inasmuch  as  "  contraction  "  implies  that  something  is 
contracted,  it  is  essential  to  have  a  clear  understanding  of 
what  that  something  is ;  and,  the  thing  contracted  being 
plainly  a  quantity,  it  is  necessary,  in  order  to  appreciate 
the  decrease  in  quantity,  to  have  an  idea  what  the  original 
quantity  was. 

What,  then,  is  the  starting  point,  the  original  quantity, 
the  disappearance  or  non-appearance  of  a  part  of  which 
makes  the  *'  contraction  ?" 

In  the  case  of  Paper  Money,  created,  as  it  is,  within  the 
view  of  the  public,  it  is  a  comparatively  simple  matter  to 
come  to  an  understanding.  The  case  of  Metallic  Money 
is  different.  Not  only  is  there  neither  precision,  nor  con- 
currence of  opinion  touching  that  which  is  indeterminate, 
but  the  principles  relative  to  the  subject  are  still  to  be 
agreed  upon.  Nowhere  in  the  range  of  monetary  discussion 
is  there,  in  my  belief,  a  greater  lack,  or  greater  need,  of 
clearness.  In  order  to  an  adequate  treatment  of  QUESTION 
VI,  it  is  therefore  necessary  to  establish  some  general 
views  with  reference  to  the  quantity  of  Metallic  Money. 

What,  then,  is  the  normal  stock  of  Metallic  Money  ? 

Three  alternatives  suggest  themselves  as  giving  the  de- 
sired point  of  departure : 

A.  The  actual  stock,  in  a  given  nation  at  a  given  time 
— let  us  say  in  Great  Britain,  in  1874 — may  be  taken  as 
the  original  quantity,  and  a  subsequent  reduction  of  that 
stock  may  be  regarded  as  "  contraction." 


82  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

B.  The  actual  stock  in  1874,  plus  an  annual  increment 
(estimated  upon  some  established  rule)  to  be  applied  as 
due  each  subsequent  year,  may  form  the  first  term  of  com- 
parison.    A    failure  in    subsequent  years  to    enlarge  the 
stock  to  the  agreed  extent  will  then  be  regarded  as  a  defi- 
ciency. 

C.  The  supposed  requirement  (for  any  given  year)  may 
be  fixed  by  the  establishment  of  certain  conditions  to  be 
fulfilled.     Such  conditions  are,  for  example,  suggested  by 
the  once  universally-admitted  principle  that  money  should 
be  stable  in  value.     The  normal  stock,  then,  for  the  period 
1874-1887,  would    be    that    stock    and    increment  which 
should  have  maintained  the   general  average  of  prices  at 
the  level  of  1874. 

A  deficiency,  then,  existing  by  comparison  with  either 
of  these  three  requirements  might  be  regarded  as  a  "  con- 
traction." Looking,  however,  to  the  practical  objects 
which  the  learned  law-giver  has  in  view,  the  requirement 
set  forth  in  C.  would  be  entitled  to  precedence.  Of  course, 
whether,  in  any  given  case,  it  is  in  the  power  of  the  law- 
giver to  afford  any  remedy  for  a  contraction,  from  the 
point  of  view  either  of  A.,  B.,  or  C.  is  a  distinct  question 
concerning  which  nothing  is  said  here.  (See  below.) 

In  further  explanation  of  the  answer  to  QUESTION  YI, 
the  subordinate  query  should  also  be  stated  whether  a 
contraction  is  "  injurious "  or  no,  upon  which  point  the 
considerations  presented  under  QUESTIONS  III  and  V  are 
applicable. 


HARD    TIMES    IN    ENGLAND.  83 


ANSWER. 


The  points  elsewhere  herein  set  forth  touching  the  pe- 
culiar effect  of  the  breach  of  established  parity  between 
silver  money  systems  and  gold  money  systems,  and  touch- 
ing the  relation  of  quantity  to  prices,  and  the  causation  of 
monetary  changes,  apply  as  reservations  to  limit  and  ex- 
plain the  following  reply : 

Yes.  England  has  so  suffered,  and  is  so  suffering.  The 
experience  of  other  gold  standard  countries  is  similar,  but 
naturally  not  identical.  For  obvious  reasons  I  shall  fol- 
low the  QUESTION  into  detail  in  reference  to  England  alone. 
A  fall  of  prices  (appreciation  of  gold),  depreciation  of 
property,  derangement  of  the  calculations  of  trade  and  in- 
vestment, all  upon  a  scale  of  importance  attracting  the 
attention  of  the  law-giver,  are  ascertained,  and  are  ad- 
mitted. 

A  deficiency  in  the  normal  stock  of  Metallic  Money  in 
England  is  also  ascertained.  The  requirements  set  forth 
in  the  third  mode  of  determining  the  normal  stock  (C)  are 
evidently  lacking.  So,  likewise,  from  the  standpoint  of 
the  second  explanation  (Bj,  there  is  a  deficiency.  Again, 
as  to  the  actual  stock  of  1874  (A),  the  evidence  tends  to 
sustain  thejbelief  that  there  is  actually  less  metallic  cash 
in  England  in  1887  than  in  1874.  That  this  contraction 
is  injurious  is  apparent. 

This  injurious  contraction  referred  to  could  have  been 
mitigated  and  probably  obviated  by  an  increase  in  the 
supply  of  gold  money ;  but,  while  it  was  not  within  the 


84  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

power  of  legislation  to  command  such  an  increase  by  in- 
creasing the  product  of  the  mines,  it  was,  and  (for  the 
benefit  of  the  future)  is,  within  its  power  to  obtain  a  sim- 
ilar result,  in  profitable  degree,  by  reuniting  the  broken 
standard  of  silver  and  gold. 

DEFINITION  OF  THE  SECOND  PART  OF  THE  QUESTION. 

The  second  part  of  the  QUESTION  VI :  "  Could  this 
contraction  of  the  currency  have  been  obviated  or  miti- 
gated by  an  increase  in  the  supply  of  gold,"  seems  to  sup- 
ply its  own  answer.  To  whatever  condition  of  things  the 
phrase  "  contraction  of  the  currency  "  may  be  applied,  an 
increase  of  the  supply  of  gold  money  must  serve  as  the 
opposite  and  negation  of  it.  As  surely  as  subtraction  is 
to  be  obviated  or  mitigated  by  addition,  so  surely  does  in- 
crease of  money  obviate  or  mitigate  or,  rather,  prevent 
contraction,  or  deficiency,  of  money.  The  stress  of  the 
QUESTION  seems  therefore  to  lie  in  the  degree  of  mitigation. 
How  much  effect  will  be  produced  by  such  and  such  an 
in  increase  in  the  supply  of  gold  ? 

An  increase  in  the  supply  of  gold  may  describe  two  dis- 
tinct events  : 

(a)   an  increase  of  the  existing  stock  in  the   hands  of 

man,  or 

(&)  such  an  increase  as  shall,  under  existing  circum- 
stances, render  an  enlarged  stock  of  money  available 
for  a  given  nation  at  a  given  period,  or,  more  definitely 
stated, 


PARITY    AND    SUPPLY.  85 

(a) 'an  increase  of  the  annual  output  of  gold  mines,  and 
(b)  the  occurence  of  such  a  change  in  the  conditions  of 
supply  or  employment  of  money-material  that  an  in- 
creased amount  of  gold   money  comes  normally  into 
use  in  a  given  country  at  a  given  time. 
It  will  be  observed  that  the  second  case  (b)  contemplates 
a  greater  quota  of  change  supplied  to  remedy  or  pre- 
vent a  deficit  than  the  first  case  (a). 

If  we  imagine  the  requirements  set  forth  in  (b)  applied 
to  England,  it  becomes  apparent  that  the  change  referred 
to  must  embrace  the  money-using  world  as  well  as  Eng- 
land. The  general  conditions  of  supply  or  employment  of 
money-materials,  which  are  to  enable  gold  money  to  flow 
into  England  will  therefore  demand  attention.  What  is 
contemplated  in  QUESTION  VI,  and  thus  in  the  ANSWERS  to 
be  made  to  QUESTION  VI,  as  a  "  contraction  of  the  cur- 
rency "  is  not  an  event  occurring  in  isolation,  but  rather 
an  event  alone  to  be  understood  as  a  part,  by  means  of  an 
explanation  of  the  whole. 

For  money-using  England  as  well  as  the  money-using 
world,  there  are  two  money-metals,  not  one  alone.  The 
supply  and  employment  of  silver,  and  the  ratio  of  exchange 
between  silver  and  gold  are  decisive  factors  in  the  mone- 
tary position  of  gold. 

With  this  observation  the  question  of  quantity  of  gold 
is  brought  face  to  face  with  an  order  of  events  distinct, 
and,  from  some  points  of  view,  incommensurate.  The 
breaking  of  the  par  of  silver  and  gold,  and  the  derange- 
ment of  valuations  arising  in  exchanges  between  silver 


86  QUESTIONS    OF    THE   ROYAL    COMMISSION. 

countries  and  gold  countries  are  in  fact  comparable  'to  the 
invasion  by  one  of  the  forces  of  nature,  of  the  field  ordi- 
narily exposed  to  the  undisturbed  working  of  another  force. 

The  collision  of  coinage  systems  merits,  therefore,  a 
treatment  quite  distinct  from  the  issues  directly  raised  by 
QUESTION  YI.  Suffice  it  to  say  here  that  the  evils  conse- 
quent upon  that  breach  and  collision  are  obviously  to  be 
in  some  measure  remedied,  and  the  future  effects  of  that 
breach  and  collision  can  be  entirely  prevented  by  remov- 
ing the  cause — that  is  to  say,  by  restoring  equality  be- 
tween the  metals. 

Without  entering  further  upon  this  field,  it  is  legitimate 
and  important  to  explain  that  the  ANSWERS  TO  QUESTION 
YI,  although  accepting  the  terms  of  "  quantity  "  imposed 
by  that  QUESTION,  make  full  allowance  (if  the  definitions 
be  clearly  understood)  for  the  perturbation  due  to  the 
break  of  the  parity  and  the  subsequent  clashing  and  con- 
flict of  coinages.  The  definition  of  the  normal  stock  (see 
page  82)  and  of  an  increased  supply  of  gold  (6,  see  above) 
show  that  the  narrow  view  touching  a  "  scarcity  of  gold  " 
is  here  excluded.  It  is  to  be  recognized  that  the  peculiar 
effects  of  the  break  of  an  established  parity  do  not  elimi- 
nate the  element  of  quantity  from  the  monetary  problem 
in  the  wider  sense.  What  increased  output  of  gold  mines 
or  silver  mines  would  have  been  needed  to  cause  a  rise  of 
silver  prices  in  silver  countries,  which  would  have  left  gold 
prices  where  they  stood  before  the  divergence  of  the  ratio  ? 
Opinions  may  vary  touching  the  required  quantity  (as  well 
as  the  effect  of  such  imagined  output  upon  the  course  of 


SUBSIDENCE    OF    OCCIDENTAL    VALUES.  87 

trade,  development  of  wealth,  distribution  of  capital,  etc.), 
but  it  will  hardly  be  denied  that  in  the  scale  of  magnitudes 
some  point  could  be  reached  where  this  imagined  effect 
would  be  produced.  Is  it  not  quite  probable  that  a  repeti- 
tion of  such  an  experience  as  the  Great  Gold  Discoveries 
in  Australia  and  California  would  have  transferred  the 
change  of  price-level  from  a  downward  movement  of  gold 
prices  in  the  Occident  to  an  upward  movement  of  silver 
prices  in  the  Orient  ? 

Turning  from  these  speculations  to  the  actual  condition 
of  the  nations  in  the  period  1874-1887,  we  can  profitably 
seek  to  define  the  importance  of  the  break-down  of  the 
parity  formerly  maintained  by  France  and  her  allies. 
What  would  have  been  the  condition  of  things  if  the  par 
had  not  been  broken  ?  The  question,  what  increased  prod- 
uct would  have  come  from  the  mines,  in  that  event,  is  im- 
portant, but  can  be  laid  aside  here  in  order  to  simplify  the 
issue.  We  assume,  then,  the  par  of  15^  to  1  maintained, 
but  the  other  great  factors  of  the  monetary  situation  of 
Europe, — the  product  of  the  mines,  the  expansion  of  the 
United  States,  the  Indian  railroads,  etc., — such  as  they 
have  been  in  fact.  Could  the  local  subsidence  of  the  valua- 
tions that  are  expressed  in  pounds  sterling  have  occurred  ? 
It  is  safe  to  say  that  the  cause  of  the  greater  part  of  this 
subsidence  would  have  been  removed. 

But  as  QUESTION  YI  treats  the  position  of  gold  money 
as  a  matter  of  quantity  alone,  it  is  germane  to  show  that, 
from  the  standpoint  of  the  legislator,  parity  is  a  factor  of 
available  quantity. 


88  QUESTIONS    OF    THE    EOYAL    COMMISSION. 

VII. 
QUESTION  VII. 

To  what  extent  and  in  what  way  are  prices  affected  l}y 
the  quantity  of  the  'metal  or  metals  used  as  standards  of 
value  f 

DEFINITION.     (See  also  QUESTION  /.) 

The  phrase  "  standard  of  value  "  in  the  above  question, 
can  only  profitably  be  used  as  a  synonym  of  money,  just 
as  the  "  metals  "  contemplated  in  it  are  gold  and  silver, 
and  no  other,  and  "  prices  "  is  but  a  name  for  the  re- 
spective equivalents  of  vendible  things  in  money  units. 

If  to  regard  a  metal  as  a  standard  of  value  carried  with 
it  no  actual  employment  of  pieces  of  that  metal  for  the 
uses  known  in  fact  as  monetary,  that  is  to  say,  if  the 
metal  were  purely  a  term  of  mental  comparison  and 
nothing  more,  as  might  be  the  case  if  one  were  to  consider 
as  a  matter  of  curiosity,  what  a  horse  was  "  worth  "  in 
platina  or  in  gallium,  the  question  might  be  treated  in  a 
different  way. 

There  would  then  be  no  need  of  laws  of  Legal  Tender, 
of  Coinage,  of  Banking,  there  would  be  no  Monetary 
Systems,  there  would  be  no  money  and  no  questions  of 
currency,  of  monetary  policy.  But  this  is  not  the  case. 
It  is  but  a  dreamland  of  the  economic  visionary  to  which 
this  latter  spiritual  meaning  of  "  standard  of  value  "  points. 
Money  exists.  The  actual  world  of  human  society  has 
always  been,  and  is  to-day,  a  world  of  payments  as  well 
as  of  price. 


THE    CLOUDLAND    OF    MONEY.  89 

Price  lias,  in  fact,  always  implied  action,  the  poten- 
tiality of  action,  of  payment  ;  it  exists  by  contemplation 
of  an  actual  exchange  of  one  thing  for  another,  and  the 
one  thing  is  the  vendible  object  and  the  other  thing  is 
money,  and  it  can  be  nothing  else,  except  by  favor  of  a 
license  of  speech  which  has  no  place  in  monetary  dis- 
cussion. Many  prices  are  not  paid,  many  exchanges  are 
made  without  transfer  of  cash.  Cash  payments  are  but  a 
fraction  of  the  totality  of  transactions,  and  the  rapidity 
with  which  cash  does  its  work  is  a  matter  of  surmise,  but, 
notwithstanding,  the  nucleus  of  these  comet-like  phe- 
nomena is  a  solid  fact  in  more  than  the  purely  material 
sense.  There  is  a  stock  of  cash,  and  with  it  some  propor- 
tion of  prices  is  paid.  But  between  the  actual  amount  of 
cash  and  the  sum  of  possibilities  of  demand  for  payment 
(the  totality  of  transactions)  there  is  a  broad  space,  so 
broad  that  it  may  well  be  likened  to  the  furthest  sweep  of 
the  comet  in  its  flight.  It  is  in  these  interstellar  spaces, 
so  to  speak,  that  the  visionary  finds  fields  of  fancy  beyond 
the  reach  of  the  glass  of  a  Montesquieu.  The  fatal  attrac- 
tiveness of  this  region  of  ideal  money,  of  "  money  of  ac- 
count" or  "  metal  used  "  mentally  "  as  a  standard  of  value  " 
is  well  attested  by  the  experience  of  to-day,  there  being  no 
lack  of  minds  that  have 

Eaten  of  the  insane  root 

That  takes  the  reason  prisoner. 

Hence  the  necessity  of  a  most  rigorous  course  of  defini- 
tion. 


90  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

QUESTION  YII  relates,  then,  to  the  effect  of  the  quantity 
of  metallic  money  upon  prices.  But  there  are  various  dis- 
tinct aspects  in  which  "  the  quantity  of  metal  or  metals 
used  as  money  "  may  be  regarded  ;  among  which  are  : 

1.  The  weight  of  the  Units  of  Coinage. 

2.  The  relation  of  parity  between  the  two  money-metals, 

3.  The  number  of  existing  copies  of  the  Units. 

4.  The  metal  not  coined  which  has  a  monetary  use. 

5.  The  metal  which  may  be  relied  on  to  recruit  the  stock 
of  money. 

The  quantity  of  substitutes  for  metallic  money  is  also 
an  element  of  importance  for  any  practical  conclusions. 

For  purposes  of  clearness  then,  treating  the  question 
in  a  practical  way,  it  is  necessary  to  contemplate  some 
normal  state  of  these  elements  of  "  quantity,"  and  this- 
can  be  conveniently  attained  by  turning  the  eye  away  from 
the  present  amorphous  conditions,  brought  about  by  the 
late  revolutionary  divorce  of  silver  and  gold,  and  regard- 
ing the  conditions  as  they  were  before  1873,  when  parity 
existed  between  the  metals,  which  affected  the  total 
stock.  In  this  assumed  normal  state  there  was  an  in- 
crement :  a  yearly  increase  of  the  stock.  Let  us  then 
aPply  QUESTION  VII  to  the  state  of  affairs  as  it  was  in 
1873,  1863,  1853,  1843. 

There  were  "  prices  "  in  those  years,  and  "  prices  "  in 
the  sense  in  which  the  word  is  used  in  QUESTION  VII, 
namely,  the  general  mass,  or  average,  of  price  of  things 
vendible. 


THE    QUANTITY    THEORY.  91 

We  ask  whether  these  prices  would  have  been  the  same 
as  they  actually  were  if  the  world's  stock  of  silver  and 
gold  in  1843,  1853,  1863,  1873  had  been  less  than  it  actu- 
ally was — if  it  had  been  half  what  it  was,  for  example.  It 
is  well-nigh  self-evident  that  prices  could  not  have  been 
the  same.  Indeed,  if  we  carry  out  the  hypothesis  with 
loyal  fulness  of  statement,  it  will  be  plain  that,  in  all 
probability,  prices  would  have  been  only  half  what  they 
actually  were. 

If,  on  the  other  hand,  we  imagine  an  equal  diminution 
in  the  world's  stock  of  any  other  form  of  wealth,  the 
amount  of  money-metal  remaining  what  it  was,  we  are  led 
to  a  very  different  conclusion. 

Of  course  no  one  can  answer  the  question  in  this  form 
with  precision.  No  one  can  answer  QUESTION  YII  in  any 
form  with  absolute  precision. 

But  the  prevailing  force  of  tendencies  can  be  clearly 
stated,  and  if  the  elements  of  any  given  special  case  are 
carefully  studied,  an  approximately  correct  conclusion 
can  be  formed.  Despite  all  the  fluctuations  of  business, 
the  constancy  of  human  nature  and  the  inertia  of  the 
metals,  and  of  laws,  afford  ample  material  for  practical 
decision. 

ANSWER. 

The  general  tendency  is  that  prices  are  in  direct  ratio  to 
the  quantity  of  money  ;  but  this  a  tendency  limited  by 
factors  which  may  be  briefly  indicated  in  the  proviso- 


92  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

•"  other  things  being  equal."  As  for  the  way  in  which 
quantity  acts  upon  price  it  can  be  regarded  as  a  special 
instance  of  "  demand  and  supply." 

VIII. 
QUESTION  VIII. 

What  is  the  relation,  if  any,  between  the  supply  or  quan- 
tity of  the  precious  metals  and  the  fluctuations  of  credit  f 

ANSWER. 

I  do  not  avail  myself  of  the  opportunity  to  enter  fully 
upon  this  question  on  account  of  the  great  extent  of  an 
inquiry  into  the  multifarious  and  evanescent  phenomena 
to  which  it  points.  I  venture,  however,  to  present  some 
elementary  observations  which  may  be  the  more  impor- 
tant because  they  are  not  infrequently  ignored. 

To  affirm  that  there  is  no  relation  between  the  supply 
or  quantity  of  the  precious  metals  and  the  fluctuations  of 
•credit  is, — if  the  proper  meanings  be  given  to  the  words, — 
an  error,  if  indeed  it  be  not  actually  a  contradiction  in 
terms.  What  are  the  fluctuations  of  credit  ?  An  increase 
or  decrease  in  the  quantity  of  obligations  expressed  in 
terms  of  money,  which  obligations  are  often  transferred 
or  exchanged  for  a  money  price.  Whether  the  relation 
of  credits  to  hard  cash  be  likened  to  the  relation  of  a 
comet's  tail  to  its  nucleus,  of  the  sun's  corona  to  the  sun, 
of  the  earth's  atmosphere  to  the  earth,  it  must  be  a  rela- 
tion and  a  relation  of  quantity. 

Whatever   problems  insoluble  in   the   present  state  of 


METHODS    OF    ECONOMIZING    SPECIE.  93 

knowledge,  these  various  relations  may  present  to  human 
curiosity,  a  considerable  body  of  data  has  already  been 
acquired  which  cannot  fear  to  be  superseded.  So  like- 
wise in  reference  to  the  relations  between  credit  and  cash, 
enough  is  known  to  give  security  in  dealing  with  the  main 
practical  tasks  which  are  to-day  incumbent  upon  the  leg- 
islator. So  far  as  the  practical  task  is  concerned,  to  which 
the  labors  of  the  ROYAL  COMMISSION  are  directed,  what  is- 
known  of  the  relations  of  cash  and  credit  can  certainly 
afford  no  valid  argument  against  a  settlement  of  the  Silver 
Question  by  concurrent  action  of  nations. 

IX. 

QUESTION  IX. 

Has  there  been  during  the  last  15  years  any  important 
development  of  the  system  of  cheques,  lank  credits,  bills  of 
exchange,  or  other  means  of  economizing  the  use  of  the  pre- 
cious metals  ? 

ANSWER. 

i 

As  compared  with  preceding  decades,  there  has  been 
in  the  last  15  years  no  important  development  of  the 
methods  of  economizing  specie. 

EXPLANATION. 

It  may  be  said,  in  a  certain  narrow  sense,  that  an  im- 
portant development  of  this  kind  is  always  going  on,  for 
although,  regarded  as  a  whole,  the  movement  may  be 


94  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

dhecked  or  counteracted  in  times  of  war  or  panic,  yet 
local  expansion  of  specie-economizing  credit  may  have 
been  present  to  minimize  the  final  result. 

Among  the  most  notable  changes  in  the  direction  of 
•economy  in  the  use  of  the  precious  metals  in  late  years, 
I  should  mention : 

The  telephone. 

The  postal  order  system. 

The  extension  of  the  telegraph. 

The  extension  of  railways. 

Question  IX,  as  I  understand  it,  demands  a  comparison 
of  what  has  occurred  through  these  and  similar  agencies, 
with  what  occurred  before.  This  comparison  seems  to 
me  to  be  clearly  unfavorable  to  the  later  period.  The 
earlier  decades  of  the  development  of  railways  and  tele- 
graphs saw  more  important  changes  than  the  latter  ;  the 
postal  order  system  was  preceded  by  great  postal  reforms  ; 
and  the  telephone  would  perhaps  operate  rather  to  pre- 
vent the  necessity  of  credits  than  to  economize  specie. 
And  the  great  development  of  systems  of  Banking  and 
Clearing  belongs  to  the  earlier  period. 

The  rate  of  increase  of  the  ratio  of  money  transactions 
to  metallic  stock  has  therefore  probably  been  reduced  of 
late  years.  The  fact  that  prices  have  fallen  in  spite  of 
the  growth  of  methods  of  economizing  specie,  points  in 
the  same  direction,  for  it  is  obvious  that,  so  far  as  it  may 
go,  economizing  specie  tends  to  promote  a  rise  of  prices. 


THE    COMPLEMENT    OF    GKESHAM's    LAW.  95 

X. 

QUESTION  X. 

Do  you  consider  that  an  international  agreement  could 
be  made  for  the  free  coinage  of  gold  and  silver  as  legal  ten- 
der money  at  a  jixed  ratio  f 

ANSWER. 
I  do. 

XI. 

QUESTION  XI. 

Is  it  in  the  p OKI er  of  governments  to  maintain  such  a  ra- 
tio if  agreed  upon  ;  and  would  the  practice  of  the  commer- 
cial world  follow  the  law  f 

ANSWER. 

Undoubtedly. 

EXPLANATION. 

The  exercise  of  power  referred  to  is  in  substance  identi- 
cal with  that  which  all  governments  have  been  wont  to 
apply  with  'success.  Touching  the  "  practice  of  the  com- 
mercial world,"  I  assert  in  favor  of  an  affirmative  answer 
what  in  the  law  is  known  as  an  estoppel.  The  established 
opinions  of  all  economists  in  a  similar  case  should  preclude 
them  from  withholding  their  agreement  with  this  affirma- 
tion. This  consensus  of  opinion  has  been  so  universal  as 
to  have  been  embodied  in  the  name  of  a  "  law." 

The  theorem  known  as  "  Gresham's  law  "  is  one  of  the 


96          QUESTIONS  or  THE  EOYAL  COMMISSION. 

commonplaces  of  economics,  and  the  affirmative  answer  to 
question  XI  rests  upon  the  same  basis  as  Gresham's  law. 
That  law  is  but  a  generalization  touching  the  working  of 
human  self-interest.  Under  the  gravitation  of  self-interest, 
men  prefer  what  is  crudely  called  the  "  cheaper  "  money 
to  the  "  dearer  "  money.  That  is  to  say,  men  gladly  part 
with  that  which  they  can  most  easily  spare,  and,  inasmuch 
as  everything  which  is  paid  is  also  received,  it  is  plain  that 
men  are  not  unwilling  to  receive  payment  in  anything 
which  they  can  pay  awray  again.  All  men  are  willing  to 
make  profit  in  a  monetary  transaction  ;  there  is  a  constant 
pressure  in  that  direction  among  money-using  men,  just 
as  every  part  of  a  body  of  water  is  always  pressing  down. 
This  is  the  controlling  fact,  this  is  human  nature.  But 
this  downward  pressure  of  water  has  two  distinct  lines  of 
manifestation,  the  one  where  resistance  is  complete,  the 
other  where  resistance  is  incomplete  ;  the  latter  being  the 
current,  the  fall,  movement,  tending  toward  the  perpen- 
dicular, the  former  the  smooth  level  of  the  lake,  quiescent, 
horizontal. 

It  is  the  former,  which  is  bodied  forth  in  Gresham's 
law.  The  latter  in  the  law  I  vindicate  ;  the  one  is  the  law 
of  disparity,  the  other  is  the  law  of  parity.  As  gravity, 
operating  upon  the  enclosed  waters  of  a  lake,  establishes 
and  maintains  a  level  surface,  so  this  gravitation  of  self- 
interest  maintains  parity.  The  desire,  the  pressure,  exist, 
but  are  neutralized  by  opposing  desire,  opposing  pressure. 
For  the  one  and  the  other  the  resistance,  the  enclosure,  is 
necessary ;  that  is  all  that  is  required  for  either  money  or 


THE    EFFECT    OF    RESTORING    SILVER.  97 

water.     Whether  it  be  pond,  lake,  or  ocean,  if  the  enclosure 
be  there,  the  level  surface  is  inevitable. 

Whence  comes  the  strange  parity  between  cheap  bronze 
pennies,  light  silver  shillings,  solid  gold  sovereigns  and 
paper  promises  to  pay  five,  or  a  hundred,  or  a  thousand 
pounds  ?  Evidently  the  English  lake  is  well  embanked 
around  by  English  law.  If  analogous  enclosure  be  given 
to  silver  and  gold  money  by  the  monetary  laws  of  nations, 
a  similar  level  of  parity  will  be  produced  and  maintained. 
This  can  be  done  by  giving  the  two  metals  equality  before 
the  law  in  a  strong  body  of  nations. 

XII. 
QUESTION  XII. 

What  would  he  the  effect  of  such  an,  agreement,  if  carried 
out,  upon  (a)  prices,  and  (b)  the  production,  of  the  precious 
metals  f 

ANSWER. 

In  reference  to  the  respective  production  of  the  two 
precious  metals,  the  current  estimates  of  probabilities 
point  to  a  diminished  output  of  gold  and  to  an  increased 
output  of  silver.  The  restoration  of  silver  to  monetary 
equality  with  gold,  presumably  at  a  higher  ratio  than  has 
obtained  of  late  years,  would  tend,  within  limits,  to  stim- 
ulate its  production  ;  but  the  estimate  of  amounts  of  in- 
crease are  frequently  exaggerated,  sometimes  to  a  prepos- 
terous degree.  An  impulsion  to  business  activity  would 


98  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

also  tend  to  enlarge  the  range  of  gold  mining,  and  hence 
to  increase  the  output  of  gold  and  to  restore  the  balance. 

So  far,  then,  as  the  annual  product  of  the  money-metals 
is  concerned,  the  total  effect  of  joint  action  of  nations  to 
equalize  them,  must  be  to  relieve  the  monetary  interests  of 
nations  from  evils  connected  with  that  source  ;  connected, 
that  is  with  a  prospect  of  wider  divergence  between  the 
metals,  and  of  an  increasing  intensity  of  employment  or 
demand,  for  a  limited  stock  of  gold.  The  practical  sense 
of  this  danger  exists  in  many  quarters,  where  its  scientific 
weight  has  not  yet  been  formally  recognized.  This  will 
appear  if  we  imagine  the  effect  of  really  important  Gold 
Discoveries.  Is  there  any  doubt  that  they  would  be  hailed 
by  economists  as  a  relief?  Can  it  be  denied  that  they 
wQuld  bring  a  certain  relief  ?  (I  refer,  of  course,  to  such 
Discoveries  in  their  character,  not  of  an  increase  in  the 
world's  stock  of  wealth,  of  capital,  but  in  the  world's  stock 
of  money,  of  circulating  treasure.  So  far  as  the  former 
character  is  concerned,  the  increment  in  gold  would  count 
no  more  than  the  same  figures  in  silver  or  in  steel.)  But 
if  this  be  true  of  what  avail  are  incantations  of  casuistry 
to  exorcise  "  the  appreciation  of  gold?  "  Whatever  relief 
could  be  wrought  by  Gold  Discoveries  which  are  not  to 
be  had,  can  be  attained  by  Intermonetary  Union,  which  is 
to  be  had. 

In  reference  to  both  prices  and  production  of  metal,  the 
effect  would  be  in  some  measure  dependent  upon  the  ratio 
adopted. 

'  Of  the  probable   effect  upon  prices  of  the  establish- 


THE    NATURE    OF    THE    SETTLEMENT.  99 

ment  of  a  ratio,  which  shall  bring  the  metals  more  closely 
together  than  they  stand  as  bullion  to-day,  while  detailed 
prediction  can  at  best  move  within  but  narrow  limits,  yet 
in  general  it  can  safely  be  affirmed  that  (assuming  the  cur- 
rency of  existing  silver  coin  to  remain  undisturbed),  this 
change  would  directly  operate  chiefly  upon  trade  between 
silver-using  and  gold-using  countries,  and  upon  the  great 
stocks  of  Money  only  in  so  far  as  their  purchasing  power 
is  affected  by  the  state  of  this  trade.  So  far  as  such  trade 
is  concerned,  it  is  also  to  be  noted  that  no  injurious  effect 
•can  be  safely  predicted,  in  the  estimate  of  which  the  fol- 
lowing points  shall  have  been  ignored,  namely  : 

First.  That  the  change  in  question  is,  as  far  as  it  goes, 
a  restoration  of  the  status  qiw  ante. 

Second.  That  its  impact  is  reduced  by  being  distributed 
between  the  two  metals. 

Third.  That  in  so  far  as  the  change  is  regarded  as  a 
settlement,  and  firm  establishment  of  the  foundations  of 
business,  there  is  some  credit  entry  against  every  debit,  a 
counter-claim  for  betterment  which  in  goodly  measure  off- 
sets each  item  of  damage.' 

If  the  ratio  of  15  J  to  1  were  restored,  the  existing  sil- 
ver in  the  hands  of  man  must  remain  in  situ.  (I  assume 
that  the  United  States  adapts  its  silver  coin  to  the  new  ratio.) 
The  silver  coin  in  gold-money  lands  is  in  use  at  its  face 
value,  and  the  silver  coin  in  silver-money  lands  is  detached 
from  gold,  connected  with  it  only  by  flexible  cords  of  trade. 
What,  then,  are  the  specific  dangers  to  Europe  that  are 
to  come  from  the  rise  of  silver  other  than  a  fall  of  "  the 


100  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

price  of  gold  in  the  money  of  the  country  "  in  Mexico  or 
Buenos  Ayres  or  Bombay,  etc.  ?  Is  it  the  return  of  con- 
fidence that  is  feared?  In  that  case  measures  can  be 
taken  to  prevent  undue  expansion  ;  and  such  measures 
could  legitimately  form  a  part  of  the  programme  of  a 
Monetary  Union. 

But  exaggerated  views  which  represent  the  foundation 
of  an  Intermetallic  Union  as  importing  a  monetary  con- 
vulsion are,  in  many  cases,  explicable  through  the  analogy 
of  an  optical  illusion.  The  inference  touching  the  future 
is  from  what  is  past  and  known,  and  what  is  past  and 
known  is  naturally  regarded,  as  it  were,  in  one  picture  ; 
as,  for  example,  all  the  depressing  elements  of  the  last 
thirteen  years  may  be  crowded  into  one  frame.  A  Res- 
toration of  the  United  Standard  is  regarded  as  implying 
the  reverse  of  all  this,  and  is  contrasted  with  it  on  even 
terms,  except  that  the  element  of  time  is  left  out  of  sight, 
so  that  everything  is  imagined  as  happening  suddenly,  at 
one  stroke  of  the  magician's  wand.  Hence  exaggeration, 
which  easily  rises  to  any  height  of  error. 

It  thus  becomes  important  to  observe  that  the  nations- 
which  are  to  bring  their  laws  into  concord  and  give  legal 
equality  to  the  two  metals  will  themselves  determine  the 
seasonable  terms  and  times  for  this  action,  and  are  not 
likely  to  act  with  undue  haste.  It  also  is  necessary  to  re- 
call that  the  years  which  have  passed  since  1873  are  past, 
and  with  them  have  gone  their  "  might-have-beens."  For 
instance,  the  money-metal  that  "  would  have  been  "  mined, 
and  was  not  mined,  in  these  thirteen  years  to  enrich  the 


THE    KATIO    TO    BE    ADOPTED.  1.01 

world's  stocks,  is  to  be  mined  in  the  coming  years,  being 
next  in  the  lode,  and  it  will  need  years  to  mine  it.  These 
too  obvious  remarks  are  called  for  when  the  alchemy  of 
learned  fancy  is  in  vogue,  by  which  that  metal  is  "  taken 
as  mined,"  just  as  a  resolution  in  a  deliberative  body  is 
sometimes  "  taken  as  read  !  " 

XIII. 
QUESTION  XIII. 

Do  you  consider  an  international  agreement  for  bimetal- 
lism possible  on  any  other  ratio  than  15 J  to  1  ? 

DEFINITION. 

I  assume  the  word  "  bimetallism "  here  to  mean  free 
coinage  and  full  legal  tender  of  silver  and  gold  at  a  certain 
ratio  (See,  also,  Definition  XY)  and  that  the  word  "  pos- 
sible "  is  taken  in  the  sense  in  which  it  is  usually  applied 
to  political  events. 

ANSWER. 

Yes. 

EXPLANATION. 

No  opinion  is  here  implied  upon  any  details  of  proba- 
bility, whether  at  Berlin,  Paris,  London,  or  Washington. 

The  question  of  the  ratio  stands  in  the  second  rank. 
The  first  interest  of  the  nations  is  concurrence,  by  which 
the  status  of  the  money-metals  may  be  fixed.  The  ratio 
is  a  matter  upon  which  any  nation  can  afford  to  make  con- 
cessions to  the  needs  of  others. 


102  QUESTIONS    OF    THE    EOYAL    COMMISSION. 

At  the  Monetary  Conference  of  1881  the  Declaration 
on  this  subject  of  the  Delegates  of  France  and  of  the 
United  States,  made  in  the  name  of  their  respective  gov- 
ernments, was  as  follows  : 

'Any  ratio,  now  or  of  late  in  use  by  any  commercial 
nation,  if  adopted  by  such  important  group  of  States,, 
could  be  maintained;  but  the  adoption  of  the  ratio  of  15J 
to  1  would  accomplish  the  principal  object  with  less  dis- 
turbance in  the  monetary  systems  to  be  affected  by  it  than 
any  other  ratio. 

'  Without  considering  the  effect  which  might  be  produced 
towards  the  desired  object  by  a  lesser  combination  of 
States,  a  convention  which  should  include  England,  France? 
Germany,  and  the  United  States,  with  the  concurrence  of 
other  States,  both  in  Europe  and  on  the  American  Conti- 
nent, which  this  combination  would  assure,  would  be  ade- 
quate to  produce  and  maintain  throughout  the  commercial 
world  the  relation  between  the  two  metals  that  sucli  con- 
vention should  adopt.' 

XIV. 
QUESTION  XIV. 

Failing  an  international  bimetallic  agreement,  ivhat 
measures  could  be  adopted  Inj  the  commercial  nations  of 
the  world  for  giving  increased  stability  to  t/ie  relation  be- 
tween gold  and  silver  f 


HALF-MEASURES.  103 

DEFINITION. 

By  the  words  "  international  bimetallic  agreement  "  as 
here  used  I  understand  a  treaty,  supported  by  appropriate 
legislation,  for  free  mintage  of  silver  and  gold  as  full  legal 
tender  at  one  ratio. 

ANSWER. 

Measures  establishing  a  steady  demand,  and  especially 
any  measures  (short  of  the  treaty  above  referred  to)  tend- 
ing to  establish  a  fixed  gold  price  for  silver,  would  if 
moving  in  concurrence,  tend  to  increase  stability,  but 
would  of  course  be  liable  to  be  counteracted  by  fluctua- 
tion in  the  output  of  the  mines,  and  by  changes  of  em- 
ployment for  existing  metal  used  as  money,  etc. 

XV. 

QUESTION  XV. 

It  is  argued  that  in  the  absence  of  bimetallism,  the 
effect  of  any  disturbance  of  the  currency  is  limited  to  half 
the  currencies  of  the  world,  and  thereby  increased  in  in- 
tensity. Do  you  consider  this  view  correct,'  and^  if  so,  do 
you  think  the  evil  a  serious  one  f 

DEFINITION. 

Current  uses  of  the  word  "  bimetallism  "  attach  to  it 
such  a  variety  of  meanings  that  in  replying  to  QUESTION 
XV  it  seems  desirable  carefully  to  define  the  sense  in 
which  its  terms  are  understood.  The  actual  condition 


104  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

of  the  monetary  systems  of  the  world  which  I  suppose  the 
ROYAL  COMMISSION  to  have  had  in  view  is  that  which  exists 
while  the  "  currencies  "  are  deprived  of  the  benefit  of  laws  of 
alternative  or  optional  free  coinage  of  the  two  metals,  which 
establish  their  practical  interchangeability  at  a  fixed  ratio. 
Such  a  condition  has  lately  been  brought  about  by  anti- 
silver  statutes  repealing  such  laws  of  equalization  of  the 
two  metals,  and  must  continue  until  new  laws  of  equaliza- 
tion shall  be  passed  in  a  body  of  nations  sufficiently  strong 
to  attain  this  end.  But  the  absence  of  such  laws  of  equali- 
zation does  not  in  fact  import  to-day,  and  is  not  here  con- 
templated as  implying,  in  the  "  currencies  of  the  world," 
the  absence  of  silver  money  or  of  gold  money,  nor  the 
absence  of  full  legal  tender  power,  nor  the  absence  of 
freedom  of  coinage,  for  either  metal ;  so  that  whatever 
"  two-metallism  "  or  "  bi-metallism  "  may  be  regarded  as 
implied  by  these  facts  is  still  present,  and  to  remain.  QUES- 
TION XV  therefore  embodies  a  comparison  between  the 
"  currencies  of  the  world  "  as  they  have  been  of  late  years, 
and  as  they  formerly  were  (or  would  be  again)  under  guar- 
antees of  intermetallic  parity. 

ANSWER. 

The  establishment  of  permanent  parity  between  the  two 
money-metals  must  impart  a  certain  fluidity  or  elasticity 
to  the  moneys  of  the  world,  which  would  act  as  a  whole- 
some air-brake  to  deaden  the  shock  of  such  disturbances 
as  seem  to  be  contemplated  in  the  QUESTION. 


ELASTICITY    OF    MONEY.  105 

This,  however,  does  not  assert  that  anything  more  than 
the  primary  impact  can  be  limited  to  one  metal,  or  to  the 
nations  whose  monetary  laws  attach  the  principal  mon- 
etary interests  of  citizens  to  that  one  metal ;  or  that  in  the 
present  state  of  instability  the  area  of  the  other  metal  can 
be  held  safe  against  the  propagation  of  disorder  originally 
arising  in  the  domain  of  the  first.  So  far  as  the  evil  is  con- 
cerned, it  is  at  least  sufficiently  serious  to  recommend  the 
relatively  trivial  effort  required  to  prevent  it. 


XVI. 
QUESTION  XVI. 

If  the  effect  of  such  disturbances  could  be  spread  over  all 
countries,  would  greater  stability  of  the  standard  of  value 
l}e  secured  thereby? 

DEFINITION. 

At  first  glance  it  wrould  not  appear  that  the  spread  of 
disturbances  could  serve  toward  securing  greater  stability. 
But  I  assume  the  QUESTION  is  only  intended  to  convey  the 
idea  of  greater  stability  than  is  attainable  under  certain 
circumstances.  And,  as  is  explained  in  the  preceding  sec- 
tion (XV),  this  implies  exposure  to  the  first  impact  of  some 
disturbances  and  to  the  rebound  of  others.  It  is  further 
to  be  observed  that  although  the  QUESTION  is  stated  in  the 
most  general  terms  it  presumably  refers  to  the  actual  con- 
dition of  things  to-day. 


106  QUESTIONS    OF    THE    ROYAL    COMMISSION. 

The  QUESTION  lias  in  view  the  future  of  the  countries 
which  now  have  gold  as  their  "  standard  of  value  "  to  the 
extent  of  excluding  silver  from  free  coinage.  It  can  thus 
be  stated  as  follows  :  Could  Europe  and  North  America 
attain  greater  monetary  stability  or  protection  against 
"  monetary  disturbances  "  if  the  metals  were  fused  into  one 
United  Standard — a  measure  which  would  give  gold,  the 
lighter  metal,  the  advantage  of  being  ballasted,  as  it  were, 
by  silver  the  heavier  metal,  amid  the  winds  and  waves  of 
monetary  disturbance  ? 

ANSWER. 

Yes.  The  United  Standard  would  give  Europe  and 
America  greater  monetary  stability  than  the  Disunited 
Standard. 

January,  1888. 


These  answers  were  sent  to  the  COMMISSION  in  print,  being   privately 
printed  in  Lausanne,  with  the  title  "The  United  Standard." 


IV. 
THE  PARITY  OF  MONEYS 

AS    EEGAEDED    BY 

ADAM  SMITH,  RICARDO,  AND  MILK 

AN  OPEN  LETTER 
ANSWERING  A  QUESTION  OF  A  MEMBER 

OF    THE 

KOYAL  COMMISSION  ON  GOLD  AND  SILVER. 


107 


THE  QUESTION  AS  STATED  WAS, 

Assuming  that  demand  is  the  most  potent  factor 
in  determining  the  value  of  the  precious  metals  : 
and  that  Governments  have  power,  by  adopting  or 
rejecting  them  for  coinage,  to  increase  or  diminish 
their  value,  is  it  clear  that  this  power  goes  to  the 
extent  of  enabling  them  thereby  to  fix  the  precise 
relative  value  of  gold  and  silver  ? 

In  order  to  simplify  the  issues  I  have  thought 
it  best  to  pass  by  whatever  may  be  debatable  in 
the  above  assumptions,  and  consider  merely  the 
question  alone,  the  terms  of  which  may  be  slightly 
modified  in  the  interest  of  precision.  The  text 
of  the  following  pages  is  therefore — 

Is  it  clear  that  the  power  of  Governments  goes 
to  the  extent  of  enabling  them  to  establish  a  stable 
ratio  between  gold  and  silver  f 


108 


To  Sir  THOMAS  H.  FARRER,  Bart., 

Abinger  Hall,  Dorking. 

DEAR  SIR  :  The  question  suggests  a  query  which  seems- 
to  me  to  lead  directly  to  the  completest  answer,  and  that  is,. 

How  has  it  come  to  pass  that  the  doubt  it  expresses  can 
e.nst  / 

The  elements  of  an  answer  which,  on  general  principles, 
one  would  expect  to  cover  the  ground,  are  contained  in 
facts  which  are  plainly  in  sight.  The  question  is  an  eco- 
nomic question.  The  merely  political  side  of  the  action 
contemplated  is  not  in  the  field  of  view.  We  are  not  ask- 
ing whether  this  or  that  nation  will  or  will  not  pass  certain 
laws  ;  we  ask  what  will  happen  if  they  do  pass  them.  In 
other  words,  when  we  speak  of  laws,  we  mean  laws,  not 
Bills  which  failed  to  pass. 

Now,  there  is  no  doubt,  in  spite  of  all  the  mirage  which 
can  be  conjured  up,  that  the  quantity  of  gold  and  silver 
in  men's  hands  is  limited  ;  and,  regarded  as  a  total,  a  stable 
quantity — unchanging  to  a  marked  degree.  The  predom- 
inant demand  and  use  for  these  metals  is  monetary,  and 
the  laws  of  nations  control  this  demand.  How  is  it  pos- 
sible, then,  that  the  power  of  these  enactments  can  be 
gainsaid  ?  If  the  laws  of  nations  work  together  to  main- 

PKEFATORY  NOTE. — The  question  was  handed  me  by  Sir  Thomas  Farrer 
in  1887,  while  I  was  his  guest  at  Abinger.  The  answer  was  made  the 
year  after  in  print,  his  name  being  given  with  his  permission.  The 
pamphlet  on  the  title-page  gave  AMICUS  CURI.E  as  the  author. 

109 


110  THE  PARITY  OF  MONEYS. 

tain  parity,  how  can  they  fail  to  produce  it  ?  What  is  there 
which  can  resist  them  ?  Nothing  !  For  the  laws  of  sup- 
ply and  demand  (the  theory  of  supply  including  that  of 
"cost  of  production")  are  really  law,  and  not  dreams. 

The  only  apparent  chance  for  escape  is  the  mirage  I 
have  referred  to,  the  confusion  about  the  limits  of  the 
supply.  An  important  phase  of  this  mirage  may  be  de- 
scribed as  an  idea  that  the  time  is  coming  when  there  will 
be  not  enough  "to  go  around  "  of  one  metal,  and  at  the 
same  time  too  much  "  to  go  around  "  of  the  other.  Has  it 
not  the  air  of  a  dream  ?  Who,  indeed,  has  the  right  to 

/>! 

predict  the  coming  of  such  an  event  ?  There  never  was 
such  a  time.  Money  of  the  two  metals  has  been  known 
since  the  age  of  fable.  It  was,  if  I  remember  the  story 
correctly,  about  2700  B.  C.  that  the  Chinese  are  said  to 
have  stamped  the  "  second  metal "  as  "  treasure  current  in 
the  peaceful  city."  Certainly  there  has  been  abundant 
opportunity  for  experiences  of  the  kind  described.  Yet 
there  never  has  been  a  time  like  that  which  our  sooth- 
sayers predict.  And  there  is  nothing  in  sight  in  the  con- 
ditions of  production  of  the  metals  to  promise  such  a  time 
for  the  future.  Here  we  may  hold  ourselves  cited  to  con- 
sider "  cost  of  production,"  and  the  sins  of  thought  that 
are  perpetrated  in  its  name.  The  errors  grow  out  of  the 
careless  use  that  is  sometimes  made  of  a  phrase  which 
needs  for  its  adequate  handling  a  most  delicate  adjust- 
ment."" It  is  necessary  to  keep  constantly  in  view — and 


*  When  X.,  for  example,  speaks  of  it,  he  gives  me  the  impression  of  a  man 
who  thinks  a  glass  should  be  equally  good  at  all  ranges  without  adjust- 


SOURCE  OF  THE  DOUBT.  Ill 

no  doubt  this  is  difficult  for  the  economist,  busy  with  the 
eventful  lives  of  ordinary  commodities — that  gold  and  silver 
are  precious,  that  they  are  imperishable  and  rare,  that  the 
utmost  find  of  any  year  is  no  more  than  a  feeble  fraction 
of  the  stock  in  hand,  so  that  an  inherent  intrinsic  monopoly 
value  attaches  to  them,  against  which  mere  "cost"  of  pro- 
ducing fresh  bullion  alone  is  powerless,  for  its  utmost  force 
is  spent  in  feebly  augmenting  the  supply. 

The  above  answer,  then,  may  fairly,  as  I  have  said,  be 
supposed  to  cover  the  ground.  In  my  belief  it  does  cover 
the  ground.  And  yet  the  doubt  expressed  in  the  question 
exists  in  some  minds.  What  is  the  origin  of  this  doubt  ? 
Is  there  some  "  fashion  of  thought "  which,  like  a  defect  of 
sight,  or  color-blindness,  vitiates  the  effect  of  evidence  ? 

The  doubt  so  expressed  will  appear  all  the  more  strange 
when  we  regard  its  habitat  in  a  certain  light.  It  is  a  doubt 
touching  the  power  of  laws  to  maintain  parity  between  two 
kinds  of  money.  This  doubt  arises,  where  ?  In  a  land 

ment.  Whether  it  is  chairs,  of  which  the  use  is  limited  and  the  available 
supply,  in  a  sense,  unlimited,  or  silver,  of  which  the  use  is  unlimited  and 
the  supply  limited,  it  is  the  same  "  cost  of  production  "  for  him.  It  never 
has  occurred  to  him  that  the  "  cost  "  he  speaks  of,  approximately  bears 
the  relation  to  the  general  cost  of  providing  money  that  the  water  spouted 
into  the  air  by  a  whale  bears  to  the  general  level  of  the  oceau.  In  fact, 
one  would  suppose  from  what  he  says,  that  now  for  the  first  time  in  the 
history  of  the  world  has  silver  mining  been  profitable.  Fortunately  the 
Welsh  gold  mines  have  made  a  diversion,  for  it  is  plain,  if  the  published 
accounts  are  correct,  that  the  "  cost  of  production  "  of  gold  is  going  to  fall 
as  low  as  certain  mines  are  supposed  to  have  brought  the  cost  of  produc- 
ing silver,  so  that  one  fall  will  neutralize  the  other  ! 


112  THE  PARITY  OF  MONEYS. 

which  for  generations  has  been  the  scene  of  a  series  of  re- 
markable parities,  kindred  to  that  which  is  now  our  theme. 

Are  not  bronze  pennies  at  par  with  silver  shillings  / 

Are  not  shillings  at  par  with  sovereigns  f 

Are  not  sovereigns  at  par  with  legal-tender  'bank-notes  f 

Arc  not  five-pound  notes  at  par  (per  pound  sterling]  with 
twenty -pound  notes  f 

Is  not  the  price  of  gold  bullion  so  steady  that  one  can  say 
there  is  parity  between  it  and  money  f 

To  these  questions  the  answer  "  yes  "  must  arise  in  an- 
tiphonal  chorus.  Qn  both  sides  of  the  shield — the  silver 
side  and  the  gold  side — these  affirmatives  are  admitted, 
these  parities  are  recognized  as  fact.  There  is  a  chain  of 
parities  extending  from  bronze  to  bullion  and  bank-notes. 
It  is  very  germane  then  to  appeal  from  the  parity  that  is 
denied  to  the  parity  that  is  admitted,  and  so  to  ask,  How 
comes  it  that  these  parities  exist  ?  How  comes  it  that 
every  one  admits  the  fact  ? 

To  the  latter  question  the  answer  is  obvious.  No  mat- 
ter how  novel  may  be  the  idea  of  inquiring  into  the  why 
and  wherefore  of  these  parities  ;  whether  they  have  been 
recognized  in  their  true  character  or  no,  they  are  matters 
of  common  daily  experience,  or  easy  observation.  The 
parities  to  which  every  one  is  witness  are,  in  fact,  as  com- 
mon as  prose.  Perhaps  they  never  have  been  called  by 
their  true  name,  but,  as  in  the  case  of  men  who  talked 
prose  without  knowing  it,  the  moment  the  idea  is  suggested, 
it  takes  a  firm  place  in  the  mind. 


CONTINUING    CAUSE    OF   PARITY.  113 

As  for  the  cause — the  reason  why  these  parities  exist — 
I  confidently  appeal  to  you  with  the  remark  that  the  entire 
structure  of  monetary  laws  enacted  by  Parliament,  and 
carried  out  by  officials  or  obeyed  by  citizens,  is  harmoni- 
ously arranged  to  maintain  them.  The  effect  is  a  regula- 
tion of  the  employment  for  these  various  things,  for  the 
pennies,  the  shillings,  the  sovereigns,  the  notes,  and  the 
bullion ;  and  thus  the  work  of  maintaining  this  equipoise 
is  done.  But  the  "  causing  cause  "  of  the  phenomenon  is 
the  statute  enacted  at  Westminster.  Can  you  suggest  any 
other  explanation  ?  Or  may  I  venture  to  believe  that  this 
explanation  is  quite  as  difficult  to  dispose  of  as  the  idea 
of  gravity,  an  idea  which  has  been  ineradicable  since  the 
days  of  Newton  ? 

I  come  back  now  to  my  query,  How  has  it  come  to  pass 
that  the  doubt  expressed  in  the  question  can  exist  ?  The 
answer  to  my  query  will,  I  think,  present  itself  most  clearly 
in  following  the  story  of  the  notions  about  money  lately 
current  in  the  learned  world.  Is  there  a  warp  or  flaw  or 
aberrant  and  deflecting  element  in  the  medium  through 
which  money  is  regarded  ?  If  there  be  such  which  affects 
our  theme,  it  may  well  prove  to  be  that  "  fashion  of 
thought "  of  which  I  have  spoken,  which,  operating  like  a 
defect  of  sight,  or  color-blindness,  vitiates  the  power  of 
evidence  and  argument.  And  in  ascertaining  that  there  is 
such  a  fashion  of  thought  not  only  shall  we  find  the  an- 
swer to  our  query,  but  also  with  it,  possibly,  lenses  which 
in  some  cases  may  do  something  to  restore  the  normal 
sight. 


114  THE  PAKITY  OF  MONEYS. 

In  relation  to  this  idea  of  a  "  fashion  of  thought,"  I 
ought  perhaps  to  explain  more  clearly  what  I  mean.  When 
a  habit  of  looking  at  certain  things  in  a  certain  Avay  is  in- 
tensified, and,  as  it  were,  gains  precedence  through  a  high 
degree  of  certainty  that  this  is  the  right  way  of  looking  at 
these  things,  then  this  habit,  which  for  the  time  is  a  sec- 
ond nature,  may  become  militant  and  agressive.  The  fakir 
who  astonishes  through  his  fortitude  under  self-inflicted 
torture,  is  proving  the  marvellous  power  of  the  will  to  con- 
trol the  senses.  It  is  not  merely  that  he  is  enabled  to  bear 
pain  without  flinching,  it  is  also  that  he  is  strong  enough 
in  spiritual  force  to  ignore  or  stifle  pain.  Why  may  not 
an  analogous  power  be  exercised  with  reference  to  the  use 
of  mental  powers,  so  that  ratiocination  is  benumbed,  and 
the  attack  of  argument  and  evidence  foiled  completely  by 
the  mind's  unconscious  efforts  of  self-defence  against 
them  ? 

Now,  if  there  be  anything  in  the  notions  current  about 
money  among  the  learned  in  these  last  decades,  which  op- 
erates in  the  way  thus  described,  it  is  plain  that  its  roots 
lie  deep,  as  a  part  of  the  historical  development  of  eco- 
nomic theory,  or  of  the  mental  habits  of  the  time.  Of  course 
I  cannot  expect  to  deal  exhaustively  with  such  a  matter  in 
these  pages.  That  could  not  be  done  without  writing  a 
book,  and  a  book  of  considerable  length.  I  can  only 
touch  here  and  there  in  the  "  stream  of  evolution,"  and  re- 
port the  result  of  analysis.  But  no  one  is  likely  to  sup- 
pose that  these  lately  current  notions  could  be  what  they 
are  in  England,  but  for  the  influence  of  great  economic 


MONETARY    SITUATION    DOWN    TO    1873.  115 

writers,  and  so  my  task  can  safely  lie  in  a  review  of  what 
such  men  said.  Beyond  that  lies  the  field  of  what  they 
thought,  or  can  be  safely  supposed  to  have  thought,  or  to 
have  left  unthouyht,  that  bears  upon  this  matter  of  the 
Parity  of  Moneys.  You  will  readily  agree  with  me  that 
chief  among  the  forces  towards  which  inquiry  should  turn, 
are  the  writings  of  Dr.  Adam  Smith,  of  David  Eicardo,  and 
of  John  Stuart  Mill.  They  are  certainly  competent  to 
have  "  set  the  fashion  "  of  thought.  What  had  they  to  say 
of  money  ? 

As  I  approach  their  writings,  I  remark  certain  general 
characteristics  of  the  times  in  which  these  great  men  lived, 
which  are  the  necessary  soil,  or  atmosphere,  or  frame- 
work— to  give  a  choice  of  similes — in  which  their  thoughts 
must  be  regarded. 

First.  The  world  in  which  they  lived  was  a  world  in 
which  silver  and  gold  were  money,  equally  money.  There 
was  no  "  Silver  Question  "  in  those  days — in  the  sense  in 
which  there  has  been  a  Silver  Question  since  1873.  On 
the  contrary,  so  far  as  the  great  world  was  concerned, 
there  was  no  break  between  the  metals.  There  was  a  little 
sparring  from  time  to  time,  like  a  family  quarrel,  but  in 
the  main  there  was  no  great  conflict  of  coinage  systems  ; 
in  general,  there  was  intermetallic,  intermonetary  peace. 

/Second.  So  far  as  the  relative  value  of  the  metals  is  con- 
cerned, there  had  been  what,  to  our  eyes,  is  a  phenomenal 
steadiness.  The  ratio  of  the  year  when  Mill  died  (1873) 
was  but  little  different  from  that  of  two  centuries  before. 
Xiocke,  as  monetary  adviser  of  the  government,  observed 


116  THE  PARITY  OF  MONEYS. 

the  same  ratios,  close  to  15.50,  which  were  noted  in  Lom- 
bard Street  while  the  later  editions  of  Mill's  "  Political 
Economy"  were  coming  from  the  press.  Indeed,  a  very 
slight  percentage  covers  the  maxima  of  fluctuation  in  that 
period. 

This  being  the  case,  one  naturally  asks  whether  the  cause 
of  this  stability  was  ever  made  the  subject  of  formal  in- 
quiry. If  such  inquiry  had  been  made,  then  the  whole 
matter  which  is  now  before  us  might  have  come  under 
most  competent  analysis.  Can  you,  Sir,  with  your  com- 
prehensive range  of  reading,  point  to  such  an  inquiry  ? 
But  though  I  ask  the  question,  I  will  not  fear  to  go  onward 
and  assume  its  answer.  If  correction  comes — and  no  one 
can  be  more  competent  than  yourself  to  administer  it — I 
must  submit  to  it.  I  know  of  no  such  inquiry,  and  have 
no  reason  to  think  it  exists. 

Furthermore,  I  observe  that  while  no  doubt  a  path-find- 
ing genius  directed  to  this  forbidding  field  of  money  would 
have  found  a  rich  vein  in  such  inquiry,  yet  it  is  not  in  ac- 
cordance with  ordinary  experience  that  such  work  should 
be  done.  Is  not  science,  like  nature,  notoriously  opposed 
to  doing  things  by  a  very  sudden  leap  ?  That  certainly  is 
my  impression.  It  seems  to  me  that  the  old  rule  of  doing 
what  thy  hand  findeth  to  do  is  generally  observed  in  the 
growth  of  knowledge  ;  that  those  who  enlarge  its  borders 
most  usefully  occupy  themselves  with  problems  which 
really  require  practical  solution — that  is  to  say,  which  make 
very  emphatic  demand  for  solution.  They  are  perhaps 
likely  to  accomplish  more  in  this  line  than  in  dealing  with 


STATUS    OF    SILVER    UNQUESTIONED.  117 

questions  which  are  not  yet,  so  to  speak,  on  the  order  of 
the  day. 

Now,  to  follow  the  figure,  the  great  problems  before  you, 
which  the  Royal  Commission  must  act  upon  in  one  way  or 
another — the  Parity  of  Moneys,  the  forces  that  produce 
it — were  not  only  not  on  the  calendar  for  Mill,  the  latest 
of  the  authorities  I  refer  to,  but  there  was  really  no  "  no- 
tice "  that  the  question  would  come  up  at  all.  There  was 
no  idea  abroad  of  abolishing  one  of  the  Precious  Metals  as 
a  money-metal,  and  still  less  were  there  overt  acts  pointing 
clearly  toward  such  outlawry,  during  the  time  when  the 
first  edition  of  Mill's  Economy  was  being  published  (1848). 
This  point,  I  mean  the  novelty  and  the  modernness  of  the 
anti-silver  doctrine — to  study  the  effects  of  whose  partial 
triumph  the  Royal  Commission  was  created — is  one  which 
I  am  perhaps  bound  to  consider  as  not  yet  admitted.  I 
therefore  refer  to  the  discussion  of  the  points  involved, 
and  to  the  evidence  presented,  in  "  The  Silver  Pound,"  a 
work  of  which  copies  were  presented  to  the  Royal  Com- 
mission nearly  a  year  ago.  I  believe  it  will  plainly  ap- 
pear, from  the  considerations  there  set  forth,  that  the  idea 
of  excluding  silver  from  its  equal  place  side  by  side  with 
gold  is  a  novelty  which  had  not  in  1848  made  its  entrance 
in  the  world  of  thought.  It  is  true  that  later,  among  the 
sequences  of  the  gold  inundations  from  California  and  Aus- 
tralia, came  isolated  suggestions  about  demonetizing  gold, 
but  that  was  all.  It  was  not  till  after  this  idea  had  spent 
its  force  that  men  began  to  think  of  getting  rid  of  silver. 
Neither  the  Treatise  of  Lord  Liverpool  nor  the  anti-silver 


]  1  8  THE    PARITY    OF    MONEYS. 

statute  of  1816  were  intended  to  promote  that  general 
exclusion  of  silver,  for  which  the  turn  of  fortune  and  of 
events  has,  in  our  generation,  shown  them  to  be  in  fact 
the  remoter  motive  forces.  They  were,  so  to  speak,  the 
material  innocentlv  accumulated,  to  which,  more  than  a 
generation  later,  the  enthusiasm  of  metrical  reformers 
communicated  the  spark  that  inflamed.  There  was,  I  say 
then,  no  notice  to  John  Stuart  Mill,  in  the  days  when  his 
great  work  on  Economics  was  being  written,  that  the 
cashiering  of  silver  as  money-metal,  or  its  reduction  to 
the  ranks,  would  ever  come  upon  the  order  of  the  day. 
Hence  there  is  no  likelihood  of  finding  in  Mill's  writings 
that  exhaustive,  thorough  examination  of  the  questions 
growing  out  of  such  an  event,  which  his  great  competence 
would  otherwise  justify  us  in  expecting. 

As  I  write  this  I  recall  a  conversation  I  had,  in  1876, 
with  one  of  Mill's  earnest  students,  whose  appreciation  I 
can  well  believe  would  have  been  very  gratifying  to  the 
author.  It  was  General  Garfield.  With  his  objection  to 
my  ideas  of  joint  action  of  nations  to  hold  the  money- 
metals  to  their  level,  came  a  reference  to  John  Stuart  Mill 
— If  all  this  was  true,  why  did  not  he,  the  Master,  say  so  ? 
My  answer  was  then,  as  now, — Mill  did  not  live  to  see  the 
sequel  of  the  great  legislative  attack  upon  silver  by  Ger- 
many and  the  other  nations. 

I  repeat,  then,  it  is  probable  that  no  specific  and  in- 
tended scrutiny  of  the  problems  to  which  your  question 
points,  or  of  the  then  existing  evidence,  is  to  be  found .  in 
Mill ;  and,  of  course,  still  less  in  Ricardo  or  in  Dr.  Smith. 


NOTIONS    ABOUT    MONETARY    SYSTEM.  119 

Coming  now  to  their  writings,  I  observe,  first,  that  there  is 
a  very  marked  note  of  neutrality  (if,  indeed,  one  should 
not  say  unconcern,  or  inertness,  or  even  fickleness)  on  the 
crucial  point,  the  matter  of  the  "  standard  "  which  they 
respectively  think  should  be  adopted  or  maintained  in 
England.  That  intensity  of  feeling  which  is  to  develop 
itself  after  1867  in  favor  of  gold  and  against  silver,  a  feel- 
ing which  is  to  rival  in  temperature  the  passions  of  party, 
gave  no  premonition  in  Smith  or  Kicardo,  and  shows  it- 
self in  Mill  only  as  predisposition,  or  as  diathesis,  to  bor- 
row a  term  from  medicine. 

Dr.  Smith  speaks  of  all  accounts  being  kept  in  silver, 
yet  of  gold  as  being  the  majority  of  the  circulation,  and 
he  mentions  and  briefly  discusses  the  idea  of  changing 
the  ratio,  and  then,  apparently  as  an  alternative,  suggests 
in  a  tentative  way,  that  lighter  coins  might  be  made,  and 
be  legal  tender  only  for  a  guinea.  Throughout  his  work, 
silver  is  the  metal  ordinarily  named  as  the  synonym  of 
money,  and  a  "  regulated  proportion  between  silver  and 
gold  "  is  mentioned  as  the  natural  outgrowth  of  national 
development. 

Eicardo,  in  distinction  from  Smith,  uses  gold  as  the 
common  name  for  money,  but  this  is  only  a  conventional 
convenience  of  speech,  just  as  he  assumes  for  convenience 
that  money  is  stable  in  value.  Per  contra  in  his  "  Plan 
of  an  Economical  and  Secure  Currency  "  for  England,  he 
proposed,  not  gold,  but  silver,  as  "  the  standard."  More- 
over, on  what  is  seen  to-day  to  be  the  vital  point  of  the 
whole  matter — Wherefore  and  how  came  gold  to  be  chief 


120  THE  PARITY  OF  MONEYS. 

metallic  money  in  London  in  his  day  ? — he  squarely  op- 
posed Lord  Liverpool*  and  makes  incisive  reference  to  a 
little  flight  of  fancy  of  Dr.  Smith.t 

Mill,  though  objecting  to  a  "  double  standard,"  so  far 
from  showing  disrespect  for  silver  as  a  money-metal,  fol- 
lows Lord  Ashburton  in  pointing  out  that  the  inconven- 
iences of  the  "  double  standard "  are  avoided,  and  its 
advantages  obtained  by  what  he  (erroneously)  supposed 
to  be  the  system  of  France.  His  idea  was  that  silver  was 
the  standard  (or  as  I  should  call  it,  unit  and  sole  legal 
tender),  while  gold  held  a  (supposed)  anomalous  position 
which  I  should  describe  as  that  of  a  trade  coin,  with  a 
name  which  served  to  give  it  a  certain  rating,  that  could 
be  varied  by  agreement.  £ 

This  brief  but  comprehensive  glance  at  the  practical 
ideas  of  Smith,  Ricardo,  and  Mill,  about  the  "  standard  " 
as  an  object  of  state  policy  is,  I  think,  conclusive,  as  re- 

*  Of  Lord  Liverpool's  idea  of  a  preference  for  gold  because  England 
was  so  rich,  he  says  (p.  222),  "it  is  not  because  gold  is  better  fitted  for 
carrying  on  the  circulation  of  a  rich  country,  that  gold  is  ever  preferred 
for  the  purpose  of  paying  debts."  In  another  place  he  observes  that  the 
use  of  gold  in  the  eighteenth  century  in  England  was  due  to  "the  inac- 
curate determination  of  the  Mint  proportions."  (p.  271.) 

t  Referring  to  Dr.  Smith's  idea  that  "  during  the  continuance  of  any 
one  regulated  proportion  between  the  respective  values  of  the  different 
metals,  the  value  of  the  most  precious  metal  regulates  the  value  of  the 
whole  coin,"  Ricaido  makes  the  significant  comment :  ''Because  gold  was 
in  his  day  the  medium  hi  which  it  suited  debtors  to  pay  their  debts,  he 
thought  that  it  had  some  inherent  quality  by  which  it  did  then,  and 
always  would,  regulate  the  value  of  silver  coin."  (p.  224.) 

t  Mill's  Principles  of  Political  Economy,  edition  of  1848,  Vol.  II,  p.  4. 


MONEY    AS    AN    OBJECT    OF    SCIENCE.  121 

spects  a  certain  branch  of  this  inquiry.  One  cannot  look 
in  their  writings  for  anything  definite  and  thorough  about 
the  nicer  issues  now  before  us.  As  no  germ  of  incitement 
is  to  be  found  in  their  writings  for  a  revolution  of  one 
metal  against  the  other,  so  there  is  nothing  positive  as  to 
the  possibility  of  that  absolute  intermetallic  peace,  of 
which  we  are  now  treating,  and  which  is  the  object  of  the 
policy  of  Monetary  Union.  In  the  world  of  practical  life, 
Smith,  Ricardo,  and  Mill  take  the  metals,  so  to  speak,  for 
"  what  they  are  worth,"  but  do  not  dogmatize  either  about 
parity  or  disparity. 

But  you  will  say  that,  notwithstanding  this,  I  have  al- 
ready pointed  to  their  teaching  as  responsible  for  a  fashion 
of  thought  about  parity  of  Moneys  which  I  regard  as 
fraught  with  error,  and  you  will  ask  where  that  teaching 
is.  It  is  this  which  I  propose  now  to  show. 

And  first  of  their  general  impressions  of  the  subject,  its 
character,  importance,  the  standing  of  money  in  the  com- 
monwealth. From  that  point  of  view,  upon  which  it  seems 
to  me  it  is  inevitable  that  one  who  wishes  to  deal  com- 
petently with  monetary  legislation  should  place  himself, 
it  is  of  importance  to  know  how  far  he  can  look  to  Smith, 
Ricardo,  and  Mill  for  instruction  about  matters  of  princi- 
ple. What,  for  example,  had  these  authorities  to  say  of 
the  importance  of  monetary  legislation,  of  the  occasions 
which  call  upon  the  legislator  for  interference,  and  of  the 
mode  and  the  purpose  of  such  action  ?  Incompleteness, 
or  onesidedness,  in  the  scientific  treatment  accorded  by 
these  writers  to  the  subject  of  Money  must  prove  to  be 


122  THE  PARITY  OF  MONEYS. 

misleading.  As  there  is  no  doubt  that  they  would  be  re- 
ferred to  as  authorities,  so  their  message  would  prove  a 
source  not  of  instruction,  but  of  confusion.  Now,  in  fact, 
at  least  as  I  understand  the  matter,  they  omit  to  deal  with 
it  exhaustively,  or  even  methodically.  To  whatever  ex- 
tent, then,  their  influence — whether  by  omission  or  com- 
mission, the  influence  of  what  they  taught,  or  what  they 
did  not  teach — remains  a  power,  it  requires  revision.  As 
for  my  views  of  what  the  course  of  this  revision  should  be, 
I  have  expressed  them  from  time  to  time  since  1876,  but 
will  briefly  set  down  herewith  as  a  postscript  a  statement 
on  the  subject  of  Money's  place  among  the  functions  of 
government,  which  can  conveniently  be  compared  with 
the  views  of  Mill  which  I  now  quote,  and  also  with  what 
once  were  the  views  of  Herbert  Spencer.* 

The  omission  or  defect  to  which  I  have  referred  is  great- 
est in  Mill,  less  in  Eicardo,  least  in  Smith.  But  it  is  not 
merely  because  Mill  wrote  last,  with  a  greater  expanse  of 
monetary  experience  in  sight  than  the  others,  that  the  de- 
fect is  more  marked  in  his  case.  It  is  also  because  of  the 
scope  and  plan  of  his  work.  An  analogous  remark  applies 
to  Eicardo.  In  Smith's  great  book  the  historical  element 
predominates  :  it  was  a  conspectus  of  the  economic  condi- 
tion of  societies.  Ricardo's  work,  Principles  of  Political 
Economy  and  Taxation,  was  a  series  of  generalizations, 
which  might  be  called  in  some  measure  a  supplement  and 
criticism  of  Smith.  But  Mill's  twelve  hundred  pages  con- 
tained not  only  Principles  of  Politiatl  Economy,  but 


*See  note  to  page  125. 


MILL'S  CLASSIFICATION.  123 

Some  of  their  applications  to  Social  Philosophy.  It  pro- 
fessedly covers  the  ground  of  Economics  in  a  wider  sense,, 
the  economic  side  and  the  political  side,  and  in  the  latter 
of  course  the  field  of  economic  statecraft,  the  sphere  and 
duty  of  government.  Book  IY  is  entitled  Influence  of 
the  Progress  of  Society  on  Production  and  Distribution + 
while  the  last  book,  Book  V,  treats,  in  eleven  chapters, 
Of  the  Influence  of  Government. 

Where,  then,  does  Money  stand,  as  an  object  of  legisla- 
tion and  of  administration  ?  What  is  the  scientific  classi- 
fication of  this  matter  of  legal  tender  for  payment,  and  the 
regulation  of  the  Mint,  which  Adam  Smith  had  referred  to 
as  from  early  ages  the  object  of  governmental  care  ?  Mill, 
in  Book  Y  and  Chapter  I,  deals  with  the  whole  matter. 
He  treats  of  the  functions  of  government — where  does  he 
find  a  place  for  Money  ? 

I  doubt  if  any  member  of  the  Eoyal  Commission  is  pre- 
pared for  the  answer.  Life  is  said  to  be  measured  rather 
by  sensations  than  by  time,  and  when,  under  the  mandate 
of  the  Sovereign  of  a  great  Empire,  gentlemen  have  been 
studying,  for  nearly  two  years,  a  question  which  has  con- 
siderably interested  the  world  since  1876,  it  is  inevitable 
that  they  should  rapidly  outgrow  a  certain  circle  of  ideas, 
which  once  may  have  been  quite  familiar.  If  the  man  could 
wear  the  cap  that  fitted  him  as  a  child,  there  would  be  no 
shock  in  realizing  what  it  is  Mill  says  about  Money. 

Mill*  treats  money  as  "coining,"  and  puts  it  side  by 


*  Vol.  II,  page  377. 


124  THE  PAEITY  OF  MONEYS. 

side  with  weights  and  measures — a  matter  of  convenience, 
to  save  the  trouble  of  assaying.  As  for  the  regulation  of 
Paper  Money  and  of  Credit  generally,  I  find  no  mention 
of  them  here,  though  they  are  elsewhere  exhaustively 
discussed  by  Mill.  So  coinage  is  put  side  by  side  with 
weights  and  measures.  That  is  all !  Let  us  pause  for 
a  moment  to  consider  where  this  doctrine  will  carry  us. 
Imagine  a  cabinet,  a  parliament,  charged  with  the  con- 
duct of  the  monetary  interests  of  a  great  nation,  draw- 
ing its  inspiration  on  that  subject  from  such  teaching. 
Evidently,  if  Money  be  cut  down,  in  the  case  now  before 
you,  to  the  limits  of  the  theory  as  stated,  the  sovereign  and 
the  rupee  are  but  weights  of  metal.  You  will  agree  with 
me,  I  doubt  not,  if  it  is  true  that  the  sovereign  and  the  ru- 
pee are  only  weights  of  metal,  this  alone  and  nothing  more, 
then  the  Royal  Commission  has  been  dealing  all  this  time 
with  a  matter  of  the  size  of  the  Troyes  Pound  or  the  Impe- 
rial Gallon.  Shall  we  say,  if  Mill  is  right,  there  may  yet 
be  a  "  Trojan"  Question  or  a  "  Gallonial "  Crisis? 

Is  the  implication  quite  clear  ?  To  make  this  page  more 
luminous,  let  me  apply  the  same  method  in  another  field — 
for  example,  to  great  works  of  art  that  have  been  the  grace 
of  civilization,  and  so  are  more  attractive  than  dry-as-dust 
theories  of  economy.  Let  those  who  have  visited  Rome 
and  Paris,  and  Dresden  know  that  the  theory  I  am  attack- 
Ing  is  like  that  which  should  treat  the  Antoninus  of  the 
Capitol  as  a  mixture  of  copper  and  tin,  the  Venus  of  Melos 
as  carbonate  of  lime,  and  the  Sixtine  Madonna  as  pigment. 
I  am  sorry  to  add  there  is  nothing  in  the  rest  of  Book  V 


MILL    AND    HERBERT    SPENCER.  125 

to  redeem  the  defects  of  this  view.  Evidently  the  writer's- 
thoughts  were  elsewhere,  or  the  mere  inconsistency  of  this 
with  other  parts  of  his  work  would  have  occurred  to  him. 
Of  course  it  is  not  at  all  implied  by  this  that  such  defects 
are  common;  indeed,  I  have  elsewhere  said  enough  to 
disprove  this.  Nor,  indeed,  is  it  just  to  my  admiration  for 
the  great  thinker  to  allow  the  implication  to  pass  that  he 
may  not  in  any  case  have  taken  a  broader  view  than  is 
here  revealed  by  his  book.  One  would  not  build  an  in- 
dictment upon  a  slip  of  the  pen.  But  print  is  a  persistent 
force,  and  fame  gives  posthumous  power  for  harm  to  the 
indiscretions  of  the  great.  .Disciples  have  a  fatal  facility 
for  building  systems  on  the  oversight  of  the  master.* 

*  An  illustration  is  given  in  the  use  lately  made  in  some  quarters  of  Mr. 
Herbert  Spencer's  utterances  on  this  subject.  See  "  Journal  of  the  Inst. 
of  Bankers,"  Pt.  VI.,  Vol.  VII.,  p.  399.  The  reference  is,  I  believe,  to 
"  Social  Statics"  (c.  xxix.)-  A  glance  at  the  book  seems  to  me  to  show 
that  it  is  unjust  to  Mr.  Spencer  to  hold  him  responsible  for  the  letter  of 
what  there  is  printed.  The  book  was  written  about  1850,  and  the  pref- 
ace of  the  American  edition  (1864)  states  that  the  reprint  must  not  be 
taken  as  a  literal  expression  of  the  author's  present  views,  and  this  pref- 
ace is  reprinted  in  the  edition  of  1868,  and  referred  to  in  the  new  preface. 

The  chapter  in  question  reveals  complete  unconsciousness  of  laws  of 
legal  tender.  The  essential  character  of  money,  which  Adam  Smith  with 
his  catholic  good  sense  was  aware  of,  is  thus  ignored.  The  author  deals 
with  money  by  taking  it  for  granted.  He  objects  to  "interference  with 
currency,"  and  thinks  that  mints  are  unnecessary — but  he  never  objects 
to  making  silver  and  gold  legal  tender,  or  explains  how  governments 
could  exist  without  money  !  His  unconsciousness  of  the  facts  also  comes 
to  the  surface  in  his  characterization  of  Scotland  as  aland  of  free-trade  in 
currency,  in  which,  of  course,  money  is  implicitly  included. 


126  THE   PARITY    OF    MONEYS. 

How,  then,  did  it  come  to  pass  that  monetary  legislation 
was  lightly  dealt  with  by  Smith,  Kicardo,  and  Mill  ?  What 
^vvas  the  source  of  this  "  fashion  of  their  thought "? 
Asking,  as  we  do,  how  they  regarded  the  Parity  of 
Moneys,  and  such  Parity  being  obviously  an  equilibrium 
supported  by  legislation,  it  is  in  the  path  of  these  inqui- 
ries that  we  shall  surely  discover  the  key  to  what  they 
may  have  to  say  which  bears  upon  the  matter.  We  have 
seen  that  they  lived  securely  while  there  was  compara- 
tive legal  equality  between  gold  and  silver,  and  that  this 
condition  of  things  seemed  so  entirely  normal  and  natural, 
that  its  causes  were  not  examined  in  a  scientific  spirit.  I 
now  inquire  whether  there  was  not  an  active  influence,  no 
longer  negative,  but  positive,  working  against  truth — a 
fashion  of  thought  which  produced  what  I  might  call  an 
innocently  studied  neglect  of  the  scientific  basis  of  mone- 
tary legislation,  and  hence  a  marked  bias  in  reference  to  it. 

I  find  such  an  influence.  I  find  it  in  the  natural  exag- 
geration of  the  enthusiasm  of  the  great  conflict  in  which 
these  great  men  spent  their  mental  life.  A  spirit  of  reac- 
tion was  naturally  engendered  by  this  conflict,  which  ob- 
scured the  truth  about  money,  but  failed  to  reveal  itself  as 
a  prejudice  to  these  lovers  of  truth,  because  no  serious 
consequences  or  erroneous  conclusions  growing  out  of 
their  default  could  show  themselves  at  the  time. 

These  thinkers  arose  to  attack  and  destroy  false  sys- 
tems. For  them  the  Commercial  or  Mercantile  System, 
together  with  its  various  developments  of  vexatious  state 
interference,  was  the  Enemy.  Their  teaching  was  aimed 


THE    MERCANTILE    SYSTEM.  127 

to  persuade  the  world  to  renounce  this  devil  and  all  his 
works. 

The  Mercantile  System,  which,  to  use  Dr.  Smith's 
words,  "  represented  national  wealth  as  consisting  in  the 
abundance,  and  national  poverty  in  the  scarcity  of  Gold 
or  Silver,"  was  a  doctrine  and  a  policy.  Gold  and  Silver, 
then,  were  involved  in  the  struggle.  But  in  that  case 
monetary  legislation  also  w7as  necessarily  involved  in  it 
together  with  them.  Economic  legislation  generally  was, 
in  its  purpose  and  effect,  monetary  legislation,  the  aim 
being  to  increase  the  national  store  of  gold  and  silver. 
The  great  work  of  these  men  was  thus  an  effort  to  abolish 
a  doctrine  and  a  policy  relating  to  the  precious  metals 
which  implied  all  manner  of  artificial  regulations  on  the 
part  of  the  state.  Was  not  this  a  conflict  likely  to  excite 
an  enthusiasm  that  would  be  capable  of  exaggeration, 
which  everyone  would  regard  as  entirely  pardonable,  if 
not  indeed  laudable  ?  How  could  the  question  escape 
exciting  a  "  political  being  "  like  man,  whose  nature  it  is 
to  put  his  heart  into  politics.  I  find  it  perfectly  natural 
on  their  part  to  be  disposed  to  draw  the  line  against 
monetary  legislation  generally — or,  if  this  could  not  be 
done  entirely,  at  least  not  to  admit  the  subject  into  the 
inner  circle  of  their  "  system  "  or  scheme. 

But  the  real  effective  strength  of  this  disposition  can 
only  be  realized  wThen  we  consider  the  general  orbit  of 
thought  upon  which  these  great  men  were  swept  along 
with  their  time,  leading  and  yet  led.  What  is  the  dis- 
tinguishing mark  of  the  whole  age  of  thought  ?  Freedom, 


128  THE  PAEITY  OF  MONEYS. 

the  rule  of  Nature,  one  phase  of  which  is  well  suggested 
by  the  words  laissez-faire,  and  non-interference.  Set  the 
individual  free  ;  remove  all  barriers  to  his  development, 
was  the  watchword  in  the  camp  of  science.  This,  then, 
was  the  principle.  But  like  all  principles  it  needed  for 
its  rightful  application  a  sound  understanding  of  its  nat- 
ural limits.  Exaggerate  the  force  of  it,  let  it  carry  men 
to  extremes,  and  you  will  seethe  gaols  open  and  the  Mint 
closed ! 

There  is,  by  the  way,  what  seems  to  me  a  curious  par- 
allel to  the  whole  situation  now  before  our  view,  which  I 
will  mention,  as  I  do  not  remember  ever  to  have  seen  it 
referred  to.  This  idea  of  a  state  of  freedom  and  rule  of 
nature*  is  but  the  same  principle  applied  to  the  social  life 
of  men  as  that  nature  in  whose  light  the  Father  of  Medi- 
cine regarded  the  bodily  frame.  The  appeal  of  the  eigh- 
teenth or  nineteenth  century  for  the  health  of  the  economic 
body  is  still  to  that  healing  power  of  nature  (vis  medica- 
trix  naturae,  as  the  modern  Latin  phrase  has  it)  which  Hip- 
pocrates must  have  revealed  to  Aristotle.  But  mark  the 
sequel !  The  principle  of  medicine  being  to  allow  nature 
to  act,  it  is  said  to  have  been  discovered  by  the  Mediaeval 
Church  that  various  operations  of  medicine,  and,  in  gen- 
eral, surgery,  were  rather  an  interference  with  nature,  and 
hence  they  were  forbidden  to  ecclesiastics.  Are  we  not 
bound  to  trace  and  identify  a  similar  superstition  among 
economic  writers  ?  Were  they  not  infallibly  led  to  treat 

*  Quesnay's  first  work  seems  to  have  been  his  Droit  Naturel. 


MONEY    IN    A    STATE    OF    NATURE.  129 

certain  departments  of  the   medicine   of  the   state  as  an 
interference  with  nature  ? 

I  trust  you  will  kindly  absolve  me  from  any  intent  of 
disrespect  toward  the  theories  of  nature.*  Of  course 
thought  is  no  more  likely  to  divest  itself  of  the  antithesis 
between  nature  and  art  than  between  right  and  left  or  be- 
tween the  equator  and  the  poles.  But  there  are  limits ; 
and  there  is  a  disposition  to  overpass  them — a  natural  dis- 
position !  I  recall  an  illustration  of  this  extreme  view, 
which  may  be  suggestive,  namely,  a  comparison  between 
Varro's  modest  line  "  that  Nature  gave  the  fields  and  hu- 
man art  made  the  cities  " — and  Cowley's 

"  God  the  first  garden  made,  and  the  first  city  Cain  !" 

Now,  I  entirely  disclaim  accusing  Mill  of  regarding 
monetary  laws  as  a  work  of  Cain.  But  it  could  fairly  be 
said  the  mood  of  the  passage  from  Mill  just  referred  to, 
and  of  others  I  shall  cite,  is  represented  by  Cowper's 

"  God  made  the  country,  and  man  made  the  town." 

As  for  the  great  Father  of  Economic  Science,  Dr.  Smith, 
I  certainly  wish  he  had  read  (or  re-read)  his  countryman 
Sir  James  Steuart.  Perhaps  he  would  have  done  so  but 
for  the  depression  caused  by  observing  those  acts  of  law- 
givers touching  money  that  filled  the  chief  place  in  the 
public  eye.  Those  acts,  as  they  class  themselves  before 
me,  were  the  debasement  of  metallic  money,  the  issue  of 
paper  money,  and  the  prohibition  of  the  export  of  coin 

*  Naturam  expellas  furcd  tamen  usque  recurret! 


130  THE  PAEITY  OF  MONEYS. 

and  bullion.  Of  these,  the  first  and  the  last  were  dis- 
tinctly tainted  with  purely  "  mercantilist  "  origin.  With 
reference  to  the  latter  I  may  mention,  in  passing,  a  curi- 
ous fact,  to  which  I  have  seen  no  allusion  in  regions  where 
one  would  expect  to  find  it,  except  in  the  statute  book.  It 
was  not  till  Mill  was  in  his  teens  that  it  became  lawful  to 
export  guinea  gold.  The  fifth  century  of  this  mercantilist 
law  in  England  was  closed  in  1819.  With  such  instances 
of  vexatious  or  disastrous  state  interference  before  him  it 
is  not  strange  that  monetary  legislation  exerted  a  certain 
repugnance  in  the  thinker's  mind. 

What,  then,  is  the  natural  effect,  in  the  case  of  such 
men,  of  an  unsympathetic  attitude  toward  monetary  juris- 
prudence ?  Evidently  an  incomplete,  unsystematized 
handling  of  the  subject.  Where  actual  history  is  in  sight 
to  be  appreciated  by  the  experienced  observer's  eye,  or 
where  action  is  to  be  taken  for  which  the  counsel  of  the 
sagacious  thinker  is  needed,  we  find  the  great  excellency 
which  the  fame  of  such  men  justifies  us  in  expecting. 
Once  outside  of  that  range,  we  are  in  strange  country. 

That  I  do  not  fail  to  appreciate  that  sagacity  has  al- 
ready been  shown.  It  remains  to  add  evidence  in  contin- 
uation of  what  has  been  said  of  the  place  of  money  in  the 
functions  of  government.  The  illustrations  which  I  shall 
give  under  this  head  relate  to  the  incompleteness  and  in- 
consistency of  statements,  the  manner  in  which  some  of 
the  great  problems  of  Money  are  left  outside  the  focus  of 
attention,  and  the  visionary  character  of  some  of  the  rea- 
soning on  the  subject. 


INCOMPLETE    GRASP    OF    THE    SUBJECT.  131 

We  have  noted  already  the  mode  in  which  the  action  of 
the  state — legislation  and  administration,  creating,  estab- 
lishing, supporting  a  monetary  system — is  taken  for 
granted.  The  great  monetary  questions  of  the  day,  chief 
among  which  is  the  regulation  of  Bank  issues,  are  fully 
discussed.  Properly  speaking,  for  the  sake  of  consistency, 
these  subjects  ought  to  be  made  to  fit  into  a  general  sys- 
tem of  monetary  legislation.  But  this  step  seems  not  to 
have  been  attempted.  Salient  facts  are  recognized,  but 
the  scientific  appreciation  of  them  is  incomplete,  and  there 
is  no  proper  apportionment  of  them  to  their  place  in  the 
system  as  a  whole.  For  reasons  already  stated  in  what 
has  been  said  of  the  general  scope  of  the  "  Wealth  of  Na- 
tions," this  remark  applies  far  less  to  that  great  book  than 
to  the  "  Principles  "  set  forth  by  Eicardo  and  by  Mill. 

The  "  sketchiness  "  of  Bicardo's  book  in  this  regard  is 
notably  exhibited  in  a  passage,  which,  in  the  days  of  a 
Boyal  Commission  on  Gold  and  Silver,  wears  a  very  strange 
air  : 

"  It  may  perhaps  be  necessary,"  be  observes,  ''to  say  a  few  words  011 
the  subject  of  the  two  metals,  Gold  and  Silver."  (p.  221.) 

As  if  only  a  few  words  were  necessary !  Elaborate  dis- 
cussion is  given  of  the  modes  of  regulating  money  credit, 
of  Paper  Money  and  Bank-notes,  all  of  which  have  an 
existence  only  relatively  to  Metallic  Money.  And  yet  the 
principles  of  regulation  of  Metallic  Money  are  but  lightly 
glanced  at.  As  a  matter  of  convenience  Bicardo  takes 
Gold  to  represent  Metallic  Money,  and  assumes  Gold  to  be 


132  THE  PARITY  OF  MONEYS. 

stable  iii  value,  and  though  he  recognizes  in  the  amplest 
manner  that  these  are  assumptions  made  purely  for  con- 
venience and  clearness,  and  without  foundation  in  fact — 
still  those  chapters  are  wanting  in  which  the  relations  of 
Gold  and  Silver  and  the  question  of  the  general  level  of 
prices  should  be  dealt  with.  At  the  same*  time  I  cannot 
resist  inquiring  what  would  have  happened  if  Ricarclo  had 
been  led  in  some  way,  to  put  his  Scheme  of  a  Monetary 
System  for  England  into  his  "  Principles."  Would  not 
the  necessity  of  cohesion  have  forced  itself  upon  his  mind? 
Could  later  economics  have  taken  the  tone  we  have  wit- 
nessed, if  he  had  treated  ex  cathedra  of  the  Principles  of 
Monetary  Legislation  with  a  high-pressure  interference 
scheme  to  back  them  ?  The  central  idea  of  what  I  shall 
name  Ricardo's  Bullion  Standard  and  Bullion  Certificate 
Scheme,  was  parity  maintained  by  all  the  force  of  law  that 
was  to  be  had.  And  I  must  also  allow  myself  the  daring 
statement  that  the  same  thing  may  be  said  of  all  orthodox 
plans  for  a  convertible  paper  currency — if  the  philosophers 
only  knew  it ! 

The  same  incompleteness,  with  a  touch  of  the  visionary 
dogmatism  of  a  mind  possessed,  as  it  were,  with  the  idea 
of  freedom,  are  visible  in  Mill.  In  his  chapter  On  the 
Value  of  Money  as  dependent  on  the  Cost  of  Production,  he 
says  : 

"  We  are,  however,  to  suppose  a  state,  not  of  artificial  regulation,  but 
of  freedom.  In  that  state,  and  assuming  no  charge  to  be  made  for  coin- 
age, the  value  of  money  will  conform  to  the  value  of  the  bullion  of  which 
it  is  made."  (I,  p.  24.) 


MILL    ON    MONEY    AND    THE    STATE.  133 

With  this  passage  we  pass  at  once  to  the  centre  of  Mill's 
system  ;  we  can  at  once  proceed  to  judge  of  the  correct- 
ness of  his  general  ideas  about  money  and  the  state. 

We  observe  that  he  speaks  of  "  a  state,  not  of  artificial 
regulation,  but  of  freedom."  We  know  he  can  only  mean 
freedom  under  the  law,  for  he  is  not  speaking  of  savages, 
but  of  an  organized  society,  and  a  purpose  of  his  book  is 
to  afford  counsel  to  rulers  how  to  make  wise  laws.  We  at 
once  ask,  then,  what  is  the  principle  of  distinction  between 
such  "  law  "  and  "  artificial  regulation,"  so  far  as  money  is 
concerned.  And  then  we  find  both  principle  and  regula- 
tion brushed  aside !  The  entire  system  breaks  down 
through  the  one  phrase  "  assuming  no  charge  to  be  made 
for  coinage."  Mill  actually  assumes  in  his  "  state  of  free- 
dom "  the  entire  apparatus  of  "  artificial  regulation  "  under 
which  he  was  born.  He  endows  his  "  natural "  state,  by 
this  brief  but  comprehensive  assumption,  not  only  with 
the  general  law  of  Money,  but  also  with  the  Statute  of  the 
18th  year  of  Charles  II,  chapter  5,  with  the  Tower  Mint, 
and  with  a  yearly  appropriation  for  expenses.  But  even 
then  he  cannot  reach  the  parity  he  speaks  of  between  bull- 
ion and  coin.  Not  merely  free  coinage  and  gratuitous  coin- 
age, but  still  another  artificial  regulation  is  wanted,  namely, 
that  statute  which  compels  the  Bank  to  buy  gold  bullion 
at  a  fixed  price.  And  yet  it  is  this  which,  in  fact,  really 
makes  gold  bullion  stable  in  value  in  England  !  Is  it  nec- 
essary to  add  further  evidence  of  the  utter  inadequacy  of 
Mill's  ideas  of  the  relation  of  monej^  and  the  state  ?  I 
submit  that  this  one  passage  makes  good  my  charge. 


134  THE  PARITY  OF  MONEYS. 

Of  course  it  is  impossible  to  advance  very  far  in  politi- 
cal economy  without  treating  of  value ;  and  when  value  is 
reached,  money  is  not  far  off.  Now  it  is  no  treason,  in 
the  year  1888,  to  say  that  money  is  a  subject  which  pre- 
sents some  difficulties.  It  was  convenient — very  conven- 
ient—  to  treat  of  value  directly  without  troubling  one's  self 
seriously  about  the  "  medium,"  money.  But  if  one  does 
not  trouble  one's  self  seriously  about  money,  the  principles 
of  monetary  legislation  fade  into  thin  air.  It  is  quite  in 
keeping  with  this  mood  to  observe,  as  Mill  does  : 

"  There  cannot,  in  short,  be  intrinsically  a  more  insignificant  thing  in 
the  economy  of  society  than  money." 

Here,  again,  is  an  even  more  striking  instance  of  dis- 
praise of  monetary  legislation,  than  Kicardo's  "  few 
words."  Of  course,  to  us  in  this  generation  it  is  pecu- 
liarly easy  to  find  such  passages  a  ground  of  surprise. 
We  live  in  a  time  of  monetary  discussions.  Not  to  men- 
tion lesser  proofs,  we  can  recall  in  1876  the  Special  Com- 
mittee of  the  House  of  Commons  on  the  Depreciation  of 
Silver,  and  the  Congressional  Commission  on  Silver  in  the 
United  States  ;  the  International  Monetary  Conferences  of 
1878  and  1881,  the  Royal  Commission  on  the  Depression 
of  Trade  which  closed  its  long  labors  in  1886,  and  the 
Eoyal  Commission  on  Gold  and  Silver  Currency,  which 
followed,  and  is  now  *  in  session.  After  all  such  a  profound 
stirring  of  opinion  and  effort  of  study,  it  seems  to  us  very 
strange  that  a  great  economic  teacher  could  say,  "  There 
cannot  be  intrinsically  a  more  insignificant  thing  in  the 
*  First  printed  in  May,  1888. 


THE    FABLE    OF    MIDAS.  135 

economy  of  society  than  money."  No  doubt,  in  a  certain 
sense,  the  statement  is  true,  and  the  truth  is  an  important 
truth  ;  but  what  is  true  in  it  is  not  a  novelty,  while  the 
too  vigorous  statement,  leading  to  an  exaggeration  of  the 
truth,  is  new.  The  truth  itself  is  of  most  venerable  ances- 
try. Was  it  not  early  in  Grecian  fable  that  the  legend 
arose  of  Midas,  to  whom  the  god  gave  his  wish,  that  all 
he  touched  should  turn  to  gold  ?  Midas  starving  in  the 
midst  of  his  gold, 

Kich  beyond  hope  and  wretched  past  despair, 
Loathing  the  wealth  he  cannot  choose  but  coiu, 
Cursing  the  boon  that  not  an  hour  ago 
He  prajred  for, 

as  Ovid  tells  the  story,  offers  a  parallel,  not  too  remote, 
both  to  the  ideas  of  Dr.  Smith  about  the  Mercantile  Sys- 
tem and  to  analogous  opinions  as  to  the  role  of  money. 
Taken,  then,  merely  as  a  forcible  statement  of  the  purely 
ancillary  relation  of  money  to  "  real  wealth  " — to  com- 
modities and  property  and  services  which  make  up  that 
sum  of  things  desired,  to  attain  which  money  is  only  a 
means — this  phrase  of  Mill's  commands  assent.  But  it  is 
more  than  this  in  effect ;  it  is  an  indication  of  what  I 
have  spoken  of,  the  disposition  to  ignore  the  nature,  and 
the  importance,  of  money  and  of  monetary  law. 

This  will  appear  more  clearly  upon  examining  the  con- 
fusion between  Money  and  Barter.  Barter  being  an  ex- 
change of  goods  for  goods  without  money,  it  is  plain  that 
to  say  that  modern  exchanges,  which  are  in  fact  exchanges 
of  goods  for  a  price,  and  of  a  price  for  goods,  are  barter, 


136  THE  PARITY  OF  MONEYS. 

is  playing  upon  words.  It  is  a  metaphor,  to  be  justified 
by  rhetorical  or  poetic  considerations,  but  not  otherwise. 
In  the  mental  process  which  its  use  implies,  money  sus- 
tains the  role  of  a  dissolving  view.  Always  a  "  middle 
thing,"  /jLSffov,  tertium  comparationis,  but  sometimes  viewed 
under  the  simile  of  an  instrument,  wheel,  vehicle,  etc.,  it 
becomes  for  some  minds  a  "  medium  "  and  nothing  else, 
and  then  as  a  mere  "  mode  of  exchanging,"  as  Mill  calls 
it,  becomes  quite  diaphanous,  as  if  it  were  thinned  and  ex- 
panded into  an  atmosphere,  which,  of  course,  is  invisible. 
But  these  metaphors  are  serious  affairs.  The  monetary 
question  embraces  a  considerable  range  of  interest.  Ex- 
tending from  Indian  taxation,  or  the  solvency  of  France, 
to  such  a  local  domestic  affair  as  the  present  abraded  state 
of  English  gold  coin,  it  is  important  enough  to  repay  look- 
ing after.  If  you  allow  these  metaphors  full  swing — and 
it  lies  in  the  power  of  the  Royal  Commission  to  do  this — 
they  will  decide  the  questions  before  you  off-hand.  If 
trade  is  barter,  of  what  use  are  standards,  and  statutes  to 
watch  over  them?  All  that  the  "  Precious  "  Metals  have 
to  do  is  to  exist,  and  that  they  do  by  the  help  not  of  man, 
but  of  nature.  No  edicts  are  needed  ;  the  fulminations  of 
Professors  and  of  Princes  are  mere  wasted  powder.  The 
way  of  Parliaments,  Commissions,  and  Congresses  of  Mon- 
etary Unions  is  quite  clear  and  perfectly  simple.  It  is  to 
do  nothing! — but,  of  course,  only  after  rejwdiny  every- 
thing ! 

The  confusion  of  money  and  barter  to  which  I  allude 
finds   root,  I    think,  in   one  of   those   phrases  for  which 


ELOQUENCE    AND    PRECISION.  137 

Ricardo's  natural  eloquence  and  cogency  of  statement  are 
responsible.  That  he  suffered  some  of  the  disabilities  of 
the  so-called  "  practical  man"  is  an  obvious  remark  when 
made,  as  I  make  it,  fifty  years  after  Senior  said  he  was 
"  the  most  incorrect  writer  who  ever  attained  philosophical 
eminence."  And  in  referring  to  money,  he  spoke  as  a  dic- 
tator, especially  after  the  Resumption  of  Cash  Payments. 
It  is  one  of  his  generalizations  that  seems  to  have  ob- 
scured in  the  eyes  of  Mill  some  modest  truths  with  which 
Adam  Smith  was  quite  content.  I  doubt  if  Ricardo  real- 
ized the  force  of  what  he  was  saying.  The  evolution  of 
doctrines  amid  the  changes  and  chances  of  this  world  are 
not  likely  to  have  occupied  his  thoughts  very  seriously. 
And  it  is  to  one  of  his  most  brilliant  generalizations  that 
the  error  seems  traceable.  The  truth  conveyed  was  in 
fact  so  important  and  the  metaphor  so  attractive,  that  it 
seems  to  have  been  impossible  for  his  followers  to  make 
good  those  limitations  of  its  field  which  should  exclude 
serious  error. 

"  Gold  and  Silver,"  says  Ricardo,  "  having  been  chosen  for  the  general 
medium  of  circulation,  they  are,  by  the  competition  of  commerce,  dis- 
tributed in  such  proportions  to  the  different  countries  of  the  world  as  to 
accommodate  themselves  to  the  natural  traffic  which  would  take  place  if 
no  metals  existed  and  the  trade  between  countries  were  purely  a  trade  of 
barter." 

Here  is,  at  the  same  time,  a  great  truth,  and  a  most 
prolific  source  of  error.  Of  the  truth  it  is  needless  for  me 
to  speak.  I  shall  presently  cite  the  opinion  of  Mill  as  to 
its  originality.  But  what  of  the  error? 


138  THE    PARITY    OF    MONEYS. 

Let  us  observe  the  hypothesis  and  dwell  upon  it  a  mo- 
ment !  "  Natural  traffic  !  "  Natnra  naturans  !  If  there 
were  only  no  metals,  that  we  might  get  back  to  a  state  of 
nature,  of  freedom  !  If  we  were  in  that  happy  state  there 
would  be  the  same  traffic,  we  should  buy  freely,  without 
money  and  without  price,  just  as  we  do  now.  And  it 
would  be  natural  traffic,  freed  from  the  vexations  that 
money  brings. 

It  is  a  far-off  echo  of  that  devout  wish  with  which  the 
too-learned  Pliny  was,  in  his  time,  inspired  by  most  fa- 
mous authors  of  still  elder  days.  (Jtimnnque  posset  e  vita 
in  totum  abdictiri, — or,  as  the  older  translation  gives  it, 
"  Oh  that  the  use  of  Gold  were  cleane  gone  ;  would  God  it 
could  possibly  be  quite  abolished  among  men  *  ~::~. 

What  a  blessed  world  was  that,  and  much  more  happier 
than  this  wherein  wee  live,  at  what  time  as  in  all  the  deal- 
ings betweene  men,  there  was  no  coine  handled,  but  their 
whole  trafficke  stood  upon  bartering  and  exchanging  ware 
for  ware,  and  one  commoditie  for  another."  What  more 
attractive?  And  yet  absolutely,  hopelessly  visionary !  Is 
it  in  Plato's  *  Republic,'  or  in  Moore's  '  Utopia,'  or  in 
'  The  New  Atlantis,'  or  in  *  Oceana,'  that  this  miracle  of 
"  natural  traffic"  can  be  imagined  as  taking  place  ?  Why 
this  excursion  into  dreamland  ? 

Now,  I  do  not  mean  that  it  is  possible  that  any  good 
head  could  be  so  possessed  with  this  dream  as  to  vitiate 
all  his  thought.  But  is  not  a  little  unsteadiness  of  nerve 
enough  when  one  is  navigating,  what  Petty  called  two 


MONEY    AND    BARTER.  13 if 

centuries  ago,  "  the  deep  ocean  of  all  the  mysteries  con- 
cerning money  ?  " 

Observe  the  effect  this  passage  of  Bicardo's  had  upon 
Mill.  He  says  of  it,  after  quoting  it  in  full  (v.  ii,  b.  iii.,  c. 
xxi)— 

"  Of  this  principle,  so  fertile  iu  consequences,  previous  to  which  the 
theory  of  foreign  trade  was  an  unintelligible  chaos,  Mr.  Kicardo,  though 
he  did  not  pursue  it  into  its  ramifications,  was  the  real  originator.  No 
writer  who  preceded  him  appears  to  have  had  a  glimpse  of  it ;  and  few  are 
those  who  even  since  his  time  have  had  an  adequate  conception  of  its 
scientific  value." 

Observe  also  the  sequel !  "  It  is  not  with  money,"  says 
Mill  elsewhere,  "  that  things  are  really  purchased." 

This,  you  will  notice,  is  a  statement  which  goes  far  be- 
yond the  idea  which  I  have  sought  to  express  in  the  phrase 
"  money  is  an  order  payable  to  bearer  upon  wealth  in  gen- 
eral;" and  which,  in  various  forms,  is  common  to  a  great 
number  of  writers,  among  whom  I  may  name  Aristotle 
and  Adam  Smith.  In  Mill's  mind  this  phase  of  money 
seems  to  grow  in  actuality.  In  another  passage  he  ob- 
serves— 

"All  interchange  is  in  substance  and  effect  barter;  he  who  sells  his 
productions  for  money,  and  with  that  money  buys  other  goods,  really 
buys  those  goods  with  his  productions.  And  so  of  nations  ;  their  trade 
is  a  mere  exchange  of  exports  for  imports ;  and  whether  money  is  em- 
ployed or  not,  things  are  only  in  their  permanent  state  when  the  exports 
and  imports  exactly  pay  for  each  other."  (ii,  168.) 

Let  us  analyze  this  with  some  care  !  "  Things  are  only 
in  their  permanent  state ! "  Precisely  !  There  is  the  truth  L 


140  THE  PARITY  OF  MONEYS. 

<r'  Things  "  tend  toward  further  exchanges,  so  as  to  rectify 
the  balance.  The  order  payable  to  bearer  on  wealth  in 
general  is  a  thing  which  the  bearer  naturally  desires  to 
•"  realize  upon."  It  is  true  of  individuals  and  it  is  true  of 
nations.  If  a  nation  receives  a  mass  of  cash  on  balance 
of  its  foreign  trade  the  tendency  is  (and  should  be)  not 
"  to  use  the  most  ferocious  measures  "  (to  quote  a  quota- 
tion of  Herbert  Spencer)  "to  keep  it  from  going  out 
again,"  but  to  circulate  it.  Of  course  the  mercantilist 
would  use  the  most  ferocious  measures  to  keep  it  back. 
Is  it  not  evident  that  the  anti-mercantilist  crusader  must 
wax  a  little  warm  in  stoutly  resisting,  and  was  in  no  mood 
to  mince  matters  of  doctrine  when  he  got  the  enemy 
within  range  of  his  mace  ? 

Why  was  it  that  the  great  man  did  not  calmly  state  the 
facts  and  omit  the  imaginary  aggravating  circumstances  of 
rhetoric  ?  Why  say  that  exchanges  with  money  are  in 
substance  and  effect  exchanges  without  money,  or,  in  other 
words,  that  black  is  white  ?  What  but  confusion  can  be 
gained  by  such  tropes  and  figures  ?  After  this  no  wonder 
this  same  great  treatise,  that  has  done  so  much  for  the 
advancement  of  science,  should  offer  matter  so  incongruous 
as  speculations  about  a  pound,  which  should  "  not  express 
any  real  thing,  but  should  be  a  mere  unit  of  calculation  ?" 
(ii,  4.)  In  this  latter  case  Mill  seems  to  me  to  give  more 
weight  to  a  tale  of  Montesquieu's  (and  perhaps  a  dream  of 
Sir  James  Steuart)  than  to  the  reasoned  opinion  of  Ricardo. 
It  is  in  such  speculations  that  certain  theories  find  their 
lofty  source,  which,  when  they  show  their  importance  in 


THEORY    OF    IDEAL    MONEY.  141 

descending  to  practice,  may  take  opposite  directions,  as- 
if  leaving  a  watershed.  I  should  briefly  describe  twa 
classes  of  them  as  the  doctrine  of  the  Printing  Press,  and 
the  doctrine  of  the  Banking  House.  Of  the  former,  the 
Paper-Money  school,  little  has  been  heard,  I  believe,  by 
the  Royal  Commission,  but  the  latter  doctrine  is  certainly 
so  strongly  held  in  certain  regions  that  I  venture  to  say  if 
Bacon  were  living  he  would  call  it  "  the  idol  of  the  Bank- 
ing House. '•*  It  is  the  disposition  to  think  that,  for  the 
monetary  legislator,  cash  is  unimportant  because  credit  is 
colossal ;  which  is  not  very  remote  from  saying  the  trunk 
and  branches  of  our  tree  are  so  enormous,  that  the  root& 
are  quite  unimportant  ! 

But  enough  has  been  said  to  show  that  as  a  systema- 
tized branch  of  knowledge  Money  lay  outside  the  focus 
of  Mill's  attention. 

*  If  to  regard  a  metal  as  a  standard  of  value  carried  with  it  no  actual 
employment  of  pieces  of  that  metal  for  the  uses  known  in  fact  as  mone- 
tary ;  that  is  to  say,  if  the  metal  were  purely  a  term  of  mental  comparison 
and  nothing  more,  as  might  be  the  case  if  one  were  to  consider,  as  a  mat- 
ter of  curiosity,  what  a  horse  "was  worth"  in  platina  or  in  gallium,  the 
question  might  be  treated  in  a  different  way. 

There  would,  then,  be  no  need  of  laws  of  Legal  Tender,  of  Coinage,  of 
Banking,  there  would  be  no  Monetary  Systems,  there  would  be  no  money 
and  no  questions  of  currency,  of  monetary  policy.  But  this  is  not  the 
case.  It  is  but  a  dreamland  of  the  economic  visionary  to  which  this  latter 
spiritual  meaning  of  "standard  of  value"  points.  Money  exists.  The 
actual  world  of  human  society  has  always  been,  and  is  to-day,  a  world  of 
payments  as  well  as  of  price. — (See  answer  to  Question  VII  of  the  Com- 
mission.) 


142  THE  PARITY  OF  MONEYS. 

With  another  illustration  I  close  this  letter.  Mill  re- 
marks that : 

"In  order  to  understand  the  manifold  functions  of  a  Circulating  Me- 
dium, there  is  no  better  way  than  to  consider  what  are  the  principal 
inconveniences  which  we  should  experience  if  we  had  not  such  a 
medium?"  *  *  * 

What  shall  I  say  of  this  ?  If  it  were  in  a  popular 
lecture  there  would  be  mere  petulance  and  hypercriticism 
in  noting  what,  from  a  higher  point  of  view,  will  seem 
deficiencies.  But  it  is  not  a  popular  lecture.  It  is  in 
"  Mill's  Principles  of  Political  Economy,"  and  in  the 
chapter  where  the  completest  scientific  exposition  of  the 
role  of  money  in  society  is  to  be  looked  for.  Surely  these 
•are  precincts  that  have  no  right  to  harbor  metaphors  and 
hypotheses  which  cannot  give  a  satisfactory  account  of 
themselves !  It  is  therefore  quite  germane  to  our  object 
to  observe  that,  taking  the  matter  strictly,  I  find  here  a 
companion  vision  to  Kicardo's. 

This  hypothesis  of  a  world  where  there  is  no  money  at 
all,  leads  straight  to  dreamland.  The  reason  of  this  is 
that  the  mind  is  invited  to  enter  upon  a  supposition  with- 
out going  through  to  the  end :  it  sees  only  certain  feat- 
ures of  the  supposed  case,  but  is  not  apprised  concerning 
the  existence  of  features  it  does  not  see,  and  no  notice  is 
given  of  the  superficial  and  provisional  character  of  any 
inferences  which  thus  can  be  drawn.  As  Mill  states  it, 
the  assumption  is  inevitably  implied  that  "  we  "  should  be 
•"  we,"  that  the  modern  world  would  be  the  modern  world, 


A    WORLD    WITHOUT    MONEY.  143 

or  indeed  (to  go  into  particulars)  that  London  could  be 
London,  and  the  English  money-using  community  an 
economic  body  just  as  it  is,  if  there  were  no  English 
money.  Is  it  not  also  implied  that  this  would  be  true  if 
there  never  had  been  any  English  money,  or  any  money 
at  all  ?  Why  not  ?  To  most  readers  certainly  this  would 
seem  a  natural  conclusion.  But  this  is  absurd !  Who  can 
speak  with  certainty  of  detail  upon  a  supposition  which 
substitutes  an  imaginary  history  of  civilization  for  the 
facts  ? 

If  once  this  full  meaning  of  Mill's  hypothesis  is  stated 
and  accepted,  its  visionary  character  will  presently  stand 
revealed.  We  can  assist  the  process  by  asking,  Why  not 
inquire  how  the  world  would  get  along  if  there  never  had 
been  any  division  of  labor,  or  any  language  ?  Or  again, 
Why  not  attempt  to  characterize  the  family  by  the  same 
method  !  The  family  is  a  very  great  subject  of  thought 
for  philosophers  of  every  school  and  specialty,  although 
it  is  the  most  familiar  thing  there  is — so  familiar,  indeed, 
that  the  word  familiar  is  derived  from  the  word  family. 
But  money  is  a  great  subject,  too,  in  its  humble  way ! 

Let  us  make  the  attempt !  In  order,  then,  to  under- 
stand the  family,  we  should  proceed  upon  the  idea  that 
there  is  no  better  way  than  to  ask  what  would  be  our  po- 
sition if  there  were  no  sex  and  no  children  ?  Do  you  not 
agree  with  me  that  this  is  a  fair  parallel  ?  Again,  recall- 
ing the  familiar  analogy  between  the  circulation  of  money 
and  the  circulation  of  the  bloo^l,  let  us  imagine  Harvey 
studying  the  circulation  of  the  blood,  and  inquiring  what 


144  THE  PARITY  OF  MONEYS. 

would  happen  if  there  were  a  natural  circulation  where 
there  was  no  blood  at  all. 

How  does  this  method  strike  you  as  a  way  of  clearing 
the  air,  or,  rather,  of  sending  light  into  the  nooks,  corners, 
and  recesses  of  the  obscure  labyrinth  of  money  ?  Is  it 
not  an  unpractical  way  of  looking  at  the  subject  ?  And 
yet  this  is  the  century  which  appreciates  Francis  Bacon's 
method,  which  is  getting  itself  trained  to  use  the  novum 
organum  !  Can  it  be  said  that  money  has  here  received 
its  share  of  scientific  treatment  ?  Evidently  not ! 

I  submit  that  the  views  I  have  advanced  are  justified 
by  the  evidence  I  have  presented.  The  natural  result  of 
the  doctrine  I  have  analyzed  is  evidently  that  unpractical 
fashion  of  thought,  of  which  I  spoke  at  first,  that  defect 
of  sight  or  color-blindness  in  reference  to  monetary  legis- 
lation, and  a  habit  of  mind  which  enlists  the  will  to  resist 
and  to  prevent  the  approach  of  knowledge.  You  will 
observe  that  there  is  a  progression  in  the  attitude  toward 
money  of  these  leading  minds  ;  a  progression  which  may 
quite  legimately  have  communicated  a  certain  momentum 
to  opinion  in  these  last  two  or  three  decades.  The  pro- 
gression is  from  apparent  complacency  and  neutrality  to 
indifference  and  finally  disparagement.  This  course,  as  I 
say,  tended  to  perpetuate  itself,  and  its  natural  sequence 
is  that  in  the  higher  walks  of  science  money  has,  to  an 
important  extent,  been  ignored,  and  monetary  legislation, 
as  it  were,  "  tabooed  :"*  language  being  used  only  consist- 

*Among  other  curious  results  of  this  error  is  the  fact  that  in  some 
minds  the  practical  monetary  question  of  the  day  has,  by  a  variety  of 


ADVANCEMENT    OF    LEARNING.  145 

ent  with  the   idea  that  the   state  ought  not  to  have  any- 
thing to  do  with  it. 

To  remedy  this  condition  of  opinion  it  is  necessary  to 
change  the  fashion  of  thought  throughout,  and  hence  to 
begin  at  the  source  by  a  revision  and  correction  of  gene- 
ral ideas  about  money  and  the  state,  and  to  this  work,  as 
you  are  aware,  I  have  sought  to  contribute.  To  the  fact 
that  such  revision  has  not  penetrated  everywhere  through- 
out the  body  of  the  learned  is  to  be  ascribed,  as  it  seems 
to  me,  the  unwillingness  of  some  minds  to  accept,  as  con- 
clusive; reasoning  such  as  that  which  I  briefly  set  forth 
at  the  outset  of  this  letter.  But  for  this  fashion,  the 
economic  question  as  to  the  power  of  nations  to  maintain 
Parity  between  the  Money-Metals  would  long  ago,  to- 
gether with  many  other  questions  of  moment,  have  been 
resolved  in  all  minds  conversant  with  economics. 

If  I  am  mistaken  in  this  opinion,  I  shall  be  greatly  in- 
debted to  you  if  you  will  set  me  right. 
Believe  me,  Sir,  with  much  respect, 

Very  sincerely  yours, 

S.  DANA  HOBTOK 

Athenaeum  Club, 

London,  May,  1888. 


illogical  links  of  association  or  analogy,  been  connected  with  a  matter  so 
foreign  to  it  as  the  question  of  tariffs,  of  '-protection"  and  "  free-trade," 
and  this,  sometimes  on  one  side,  sometimes  on  the  other,  upon  lines  quite 
contradictory  with  each  other. 


146  THE    PARITY    OF    MONEYS. 


MONEY    AND    THE    STATE  :    OR,    THE    PLACE    OF    MONEY   AMONG 
THE   FUNCTIONS    OF   GOVERNMENT. 

When,  in  the  earlier  stages  of  civil  society,  systematized 
government  came  into  existence,  there  arose  of  necessity 
what  I  shall  call  an  Institution  of  Obligatory  Payment. 
This  may  be  regarded  as  accompanying  both  the  growth 
of  rights  and  the  differentiation  or  specialization  of  func- 
tions among  the  members  of  the  community.  Whether  in 
public  war  or  peace,  or  within  the  domestic  sphere,  in  mat- 
ters civil  and  in  matters  criminal,  comes  Obligatory  Pay- 
ment. Be  it  Tribute,  or  Tax,  or  Fine,  or  Damages,  it  is  the 
agent,  adjunct,  and  ally  of  those  powers  of  the  community 
to  keep  force  and  fraud  in  subjection,  which  are  the  very 
essence  and  life  of  the  Civil  State.  The  material  of  Obliga- 
tory Payment  is  money.  It  is  the  State  which  fixes  upon 
the  object  with  which  payment  can  be  made,  and  estab- 
lishes the  name  of  Money,  or  Units  of  Valuation. 

But  what  of  Voluntary  Payment — the  work  of  commerce 
with  its  medium  of  exchange — to  relieve  the  individual 
from  the  manifold  inconveniences  of  barter  ?  Voluntary 
Payment  is  present  and  of  equal  date,  if  not,  indeed,  the 
elder.  But  not  the  stronger !  The  individual,  one  against 
all,  cannot  escape  the  controlling  force  of  the  corporate 
will,  which,  in  prescribing  how  Tax  and  Fines  and  Dam- 
ages are  paid,  shows  him  the  most  convenient  medium  for 
exchanges.  Of  course,  the  individuals  form  the  State, 
governments  are  their  representatives,  and  mere  conven- 


MONEY    AND    THE    STATE.  147 

ience  in  some  measure  leads  the  former  to  respect  the 
will  of  the  people.  But  the  single  corporate  will  is  para- 
mount. Whatever  the  play  of  interaction,  the  effective 
control  is  in  the  State.  And  the  State  cannot  escape  the 
duty  of  exerting  a  control,  for  that  control  is  a  condition 
of  the  State's  existence.  Without  organization  to  restrain 
force  and  fraud  the  State  ceases  to  exist.  It  must  defend 
its  existence  against  enemies  ;  it  must  keep  the  peace 
within,  and  see  that  civil  rights  are  respected  in  some 
measure  ;  and  for  this  it  must  have  Obligatory  Payments, 
Money,  Accounts,  Valuations.  The  tendency  of  economic 
writers  has  been  to  ignore  this,  and  to  start  from  the 
trader's  medium  of  exchange,  and  to  regard  it  alone. 

In  setting  forth  this  view  as  my  own  I  allow  myself  to 
cite  the  testimony  to  that  effect  of  Professor  De  Laveleye, 
in  an  address  before  the  French  Institute  (Acad.  of  Moral 
and  Political  Sciences),  May  10,  1881. 


A  paper  on  '  The  Parity  of  Bullion  and  Modes  of  Main- 
taining it,'  which  followed  the  above  as  first  printed  in 
London,  June,  1888,  is  given  on  later  pages  in  sequence 
to  the  chapter  on  '  Bullion  or  Coin  ?  ' 


V. 


FEDERATION    FOR    PARITY    OF   MONEYS 
AND  THE  ADVANCEMENT  OF  SCIENCE. 


FEDEKATION  FOE  PAKITY  OF  MONEYS  AND  THE 
ADVANCEMENT  OF  SCIENCE. 

AN  ADDRESS  ANSWERING   THE  QUESTION  "  WHAT  SHALL  WE 

DO  ABOUT  SILVER,"  BEFORE  THE  AMERICAN  ASSOCIATION 

FOR  THE  ADVANCEMENT  OF  SCIENCE. 


ABSTEACT. 

The  persons  addressed  are  the  members  of  this  Section. 
For  them  Silver  represents  a  duty.  It  was  Science  turned 
politics  that  engendered  that  morbid  condition  of  money 
which  creates  the  Silver  Question,  and  it  is  for  the  interpre- 
ters of  Science  to  redeem  this  error  by  promoting  a  speedy 
settlement  of  the  issues  thus  raised.  What  is  to  be  taught 
by  those  who  wish  to  advance  Science  ?  The  true  reme- 
dial policy  was  instituted  by  the  United  States  in  1878,  by 
proposing  to  nations  controlling  the  majority  of  the  money- 
metals  the  adoption  of  concordant  laws  assuring  them 
legal  equality.  It  is  in  supporting  this  lead  that  Science 
advances. 

The  basis  of  truth  and  fact  sustaining  this  policy  can  be 
summarized  on  the  following  lines. 


NOTE. — This  subject  was  chosen  by  the  Committee  of  Section  I  (Eco- 
nomic Science  and  Statistics)  in  1888,  and  Professor  Sumner  and  I  were 
invited  to  represent  the  opposing  sides  of  debate  at  Toronto,  September 

3,  1889.     This  paper  was  forwarded  by  me  from  Europe  to  the  Secretary. 

151 


152  SCIENCE    AND    THE    FEDERATION    POLICY. 

AFFIRMATIVE  STATEMENT  OF  THE  FEDERALIST  POSITION. 

I. 

That  Gold  and  Silver  are  the  Money-Metals,  and  that 
Gold  is  Money  and  Silver  is  Money  to-day. 

II. 

That  Parity  of  Moneys  is  desirable. 

III. 

That  it  is  the  law  of  each  nation  which  determines  what 
is  Money  in  that  nation. 

IV. 

That  the  preponderant  employment — that  is  to  say, 
economic  "  demand  " — for  Gold  and  Silver  is  an  effect  of 
the  laws  of  nations. 

V. 

That  Monetary  Laws  establish  Parity. 

VI. 

That  permanent  Parity  between  Silver  and  Gold  is  pro- 
ducible by  a  proper  regulation  of  their  employment. 

VII. 

That  concurrent  laws  for  legal  equality  of  the  metals  in 
an  effective  majority  of  nations  will  establish  Parity  out- 
side as  well  as  within  their  direct  jurisdiction. 


ABSTRACT.  153 

YIII. 

That  such  Parity  benefits  each  nation  by  assuring  com- 
parative stability  to  the  valuations  in  which  it  is  interested. 

IX. 

That  Federation  is  a  condition  and  a  guarantee  of  such 
concurrent  laws,  replacing  those  which  now  maintain  dis- 
parity. 

X. 

That  the  paramount  monetary  issue  of  the  age  is  whether 
a  settlement  on  this  basis  shall  be  made. 


STATEMENT 

OF 

THE  DIS-UNIONIST  OR  ANTI-FEDERALIST  POSITION. 

Scientific   conservatism  and   dependence  upon  the  ex- 
ample of  England. 

The  opinion  of  Michel  Chevalier  in  1878. 


154  SCIENCE    AND    THE    FEDERATION    POLICY. 


FEDERATION  FOK  PARITY  OF  MONEYS  AND  THE  ADVANCEMENT 
OF  SCIENCE,  OR  "WHAT  SHALL  WE  DO  ABOUT  SILVER?" 

Who  are  "  we  "  that  are  to  do  something  about  silver  ? 
What  are  the  active  forces  of  which  I  am  to  speak  ? 

Am  I  to  set  forth  what  I  think  we,  the  people  of  the 
United  States,  or  of  Canada,  should  do  about  silver  ?  It 
is  only  at  elections  that  the  people  can  act,  in  the  proper 
sense — act  as  one  united  force — and  I  am  not  aware  that 
there  is  an  election  at  hand.  I  may,  however,  say  in 
passing,  that  if  there  were  elections  at  hand,  I  should  only 
need  to  repeat  the  substance  of  certain  planks  of  political 
platforms  about  silver  which  have  been  actually  adopted  ; 
for  example,  by  the  Republicans  in  the  State  of  Ohio  in 
1877,  by  the  National  Republican  Convention  in  1884,  and 
by  the  Republican  and  Democratic  Conventions  in  New 
York  State  in  1885.  The  first  mentioned  is  a  recommen- 
dation, while  the  latter  are  a  ratification,  of  the  policy 
adopted  by  Congress  in  the  second  section  of  the  Act  of 
February  28, 1888.  This  is  not  the  section  compelling  the 
compulsory  coinage  of  silver  dollars,  it  is  that  by  which 
the  United  States  inaugurated  a  policy  of  restoration  of 
silver  to  its  former  equality  with  gold  by  joint  action  of 
nations. 

This  policy,  which  by  its  nature  combines  the  elements 
of  a  domestic  policy  and  a  foreign  policy,  has  remained 
since  1878  a  settled  policy  of  the  United  States.  I  ven- 


WHAT    SHALL    WE    DO    ABOUT    SILVER?  15f> 

tare  to  believe  it  is  as  firmly  established  as  the  Monroe- 
Doctrine.  So  far,  then,  as  the  United  States  as  a  whole 
are  concerned,  I  need  not  undertake  the  task  of  making 
suggestions  about  anything  it  may  need  to  do  with  refer- 
ence to  silver. 

Nor  shall  I  ask  what  the  several  branches  of  the  legis- 
lative '  powers  that  be ',  whether  the  Senate  or  the  House,  or 
this  Committee  thereof  or  that,  have  to  do  on  this  subject. 
Nor  shall  I  venture  to  discuss  the  possibilities  that  lie 
before  the  President  or  his  Ministers  in  this  regard.  No 
doubt  there  are  essays  to  be  written  which  might  rightly 
hope  to  attain  such  an  audience.  But  there  is  no  need 
now  to  go  beyond  the  limits  of  this  room,  or  the  list  of 
the  members  who  belong  here,  to  find  ample  work  to  be 
done,  good  work,  work  of  conversion,  for  the  advance- 
ment of  science,  work  that  all  the  members  are  pledged  to 
support. 

The  "  we  "  of  whom  I  speak,  then,  are  the  members  of 
the  section  of  Political  Economy  and  Statistics  of  this 
Association.  I  conceive  they  have  something  to  do  for 
themselves  and  for  their  fellow-men  in  regard  to  this 
matter  of  silver.  The  silver  question  covers  something 
more  than  a  scientific  generalization  waiting  to  be  proved, 
a  compound  waiting  to  be  analyzed,  a  discovery  waiting 
to  be  verified.  All  these  can  wait.  But  the  silver  ques- 
tion involves  a  duty  to  be  performed,  and  to  wait  is  to- 
neglect  that  duty.  It  is  a  duty  which  the  interpreters 
of  science  now  living  owe  it  to  themselves — to  the  cause= 
of  learning — to  perform  without  delay. 


156  SCIENCE    AND    THE    FEDERATION    POLICY. 

Be  it  known  to  all  friends  of  science — and  never  forgot- 
ten— it  was  science  which  engendered  the  silver  question 
with  the  dangers  and  anxieties  that  have  come  in  its  train. 
It  was  the  mistaken  learning  of  1867,  of  1871,  and  1873, 
which  did  the  damage  that  the  settlement  of  the  silver 
question  is  to  check,  and,  as  far  as  may  be,  to  make  good. 
It  was  upon  the  incital,  and  with  the  approval,  of  an  over- 
whelming majority  of  the  learned  of  all  nations,  that  the 
.statutes  and  decrees  of  silver  outlawry  in  divers  nations 
became  fact.  Americans  must  take  to  heart  that  for  this 
general  error  of  policy  the  United  States  have  their  share 
of  responsibility,  for  in  1867""  the  influence  of  the  Amer- 
ican Union  in  the  family  of  nations  was  militant  in  Paris, 
aiding  and  abetting  the  anti-silver  movement  then  or- 
ganizing. And  all  was  done  with  the  best  intentions,  and 
under  the  advice  of  counsel  recognized  as  learned  in  the 
law. 

What  "  we  have  to  do  about  silver,"  then,  is  to  educate 


*  This  was  shortly  after  the  Latin  countries  had  joined  in  a  Monetary 
Treaty,  forming  the  "  Latin  Union,"  which  the  United  States  was  invited 
to  join.  Hon.  Samuel  B.  Ruggles,  of  New  York,  was  accredited  to  the  Con- 
ference of  1867  by  Mr.  Seward,  then  Secretary  of  State.  Among  the 
monetary  questions  then  debated  was  reducing  the  weight  of  the  gold 
dollar,  so  as  to  coin  (when  specie  payment  should  return)  a  five-dollar 
piece,  which  should  equal  either  the  English  sovereign,  or  a  proposed 
25-franc  piece,  which  was  intended  to  replace  the  20-franc  piece,  Louis 
-d'or  or  Napoleon,  in  France. 

In  the  Document  of  the  Monetary  Conference  of  1878  are  reprinted 
the  various  state-papers,  which  explain  the  situation  in  1867.  A  resume 
of  the  proceedings  of  the  Conference,  in  the  speech  of  Mr.  de  Parieu,  is 
given  in  the  Appendix. 


WHAT    SHALL    WE    DO    ABOUT    SILVER?  157 

public  opinion  and  to  advance  science,  to  learn  and  ta 
teach  important  truths  relating  to  money — for  silver  is 
money,  and  has  been  since  the  economic  world  began — 
important  truths,  I  say  ;  truths  that  will  assist  the  present 
generation  of  citizens  or  legislators  to  safeguard  their 
higher  interests  by  what  they  do  or  leave  undone  with 
reference  to  it. 

What  are.  these  truths?  The  first  truth  of  all,  first 
because  simplest  and  at  the  same  time  universal,  prim  a 
inter  pares,  is  that  the  policy  of  federation  for  equality 
of  the  metals  before  the  law — -which  is  the  American 
policy,  if  our  brothers  of  Canada*  will  permit  us,  vis-a-vix 
to  Europe  and  Asia,  to  represent  the  Continent — is  right. 

The  policy  of  federation  to  restore  silver  to  its  former- 
legal  position,  the  policy  of  establishing  and  maintaining 
parity  between  the  two  halves  of  the  world's  money,  is 
right.  The  accord  of  an  effective  majority  of  nations  to  close 
a  period  of  disastrous  economic  conflict  and  disturbance 
by  a  catholic  measure  of  peace  and  order,  is  a  good  work. 
Once  achieved,  a  nation  may  be  proud  of  its  share  in  it. 
There  is  enough  of  barbarism  and  dulness  within  sight  in 
our  time  to  serve  as  a  foil  to  this  enterprise  of  civiliza- 
tion ;  and  individuals  who  contribute  their  little  quota  to- 
ward bringing  about  its  success,  need  to  have  their  labours- 


*  I  may  add  in  parenthesis  that  they  can  the  more  willingly  permit  us  to 
do  this,  since  they  are  in  some  measure  committed  in  favour  of  that  pol- 
icy. Such  at  least  was  the  impression  which  the  highly  appreciated  Ca- 
nadian ally  of  the  United  States  delegation,  Sir  Alexander  Gait,  conveyed 
to  the  members  of  the  International  Conference  at  Paris  in  1881. 


158  SCIENCE    AND    THE    FEDERATION    POLICY. 

brightened  if  not  lightened  by  appreciating  the  quality 
•of  it. 

The  project  passes  slowly  towards  achievement — slowly, 
for  it  must  triumph  over  both  the  prejudices  of  men  and 
the  inertia  of  nations.  But  it  is  progressing,  and  pro- 
gressing fast,  now  at  length  that  the  harvest  of  conversion 
in  England  is  coming  into  sight — in  England,  which  alone 
has  blocked  the  way  ;  for  in  1881  the  attitude  of  Germany 
promised  her  readiness  to  join  in  full  with  France  and  the 
United  States  when  England  should  do  so.  The  time, 
then,  is  approaching  for  realization  of  the  project  proposed 
in  1878,  the  time  when  civilization  is  to  make  a  forward 
step  to  reach  a  united  standard. 

What  the  members  of  this  section  "  have  to  do  about 
silver"  is  to  accelerate  this  advance ;  to  recognize,  and  upon 
occasion  to  teach,  the  basis  of  truth  and  fact  upon  which 
is  reared  this  policy  of  federation  to  secure  legal  equality 
between  silver  and  gold.* 

I  shall  try  to  characterize  briefly  this  basis  of  truth  and 
fact  by  a  rough  sketch-map,  political  rather  than  economic, 
giving  practical  generalizations  rather  than  their  scientific 
sub-structure. 

*  As  has  long  been  my  custom  I  give  notice  to  any  one  seeking  informa- 
tion touching  the  measure  proposed  in  1878,  that  the  Document  of  the 
Conference  of  1878  is  still  gratuitously  distributed  from  the  Depart- 
ment of  State  at  Washington,  by  mail,  upon  application  to  the  Chief 
Clerk. 


THE    FEDERALIST    POSITION.  150 


AFFIRMATIVE  STATEMENT  OF  THE  FEDERALIST  POSITION. 

I. 

That  Silver  and  Grolcl  are  the  Money-Metals,  and  that 
Gold  is  Money  and  Silver  is  Money  to-day. 

Of  the  above  affirmation  I  select  as  the  only  probable 
object  of  denial  which  calls  for  encounter,  the  statement 
that  silver  is  money  to-day.  Are  all  the  members  of 
this  section  fully  aware  of  this  ?  I  hope  they  are,  but  I 
fear  they  are  not ;  I  fear  there  are  exceptions.  I  have 
had  the  opportunity  of  meeting,  in  books  or  in  conver- 
sation, the  minds  of  most  of  the  learned  of  our  century 
who  have  dealt  with  monetary  questions,  and  I  have 
found  in  all  that  goodly  company  few  who  entirely 
realized— in  the  subtle  yet  most  important  sense  in 
which  the  phrase  is  now  to  be  used — that  silver  is  money. 
This  sense  or  meaning  of  the  phrase  springs  from  the  in- 
ternationality  of  money ;  the  solidarity  of  interest,  the 
effective  contiguity,  or  the  continuity  of  the  various  sys- 
tems of  money  (which  make  up  the  total  money  of  the 
world),  whereby  each  has  an  interest  in  all,  enjoys  the  lat- 
eral support  of  all,  and  each  serves  in  part  as  a  means  of 
business  communication  with  the  other.  There  is  here  a 
truth  which  is  far  from  having  completed  its  struggle  for 
recognition.  Indeed  the  concepts  in  use  to-day  in  rnon- 


160  SCIENCE    AND    THE    FEDERATION    POLICY. 

etary  discussion  are  curiously  adapted  to  veil  it  from  the 
understanding.  What  with  "Single  Standard"*  and 
"  Double  Standard  "  and  "  Bimetallism  "  and  "  Monomet- 
allism," it  is  singularly  easy  to  ignore  the  internationally 
of  money.  Then  again  there  is  the  word  "  demonetize." 
What  have  we  not  heard  of  eloquence  about  the  demoneti- 
zation of  silver,  and  yet — in  spite  of  the  demonetizing 
devil  and  all  his  works — silver  is  money.  So  likewise,  one 
might  say,  for  generations  men  have  heard  of  the  conquest 

*  In  connection  with  my  criticism  of  the  verbal  fallacies  prevalent  among 
the  partisans  of  gold,  and  especially  the  application  to  money  of  the 
word  "  Standard"  in  the  sense  of  the  exact  sciences,  to  which  space  is 
given  in  pages  45  and  47,  I  may  justly  add  a  pendant  touching  the  silver 
side  of  this  protracted  controversy ;  for  there  are  verbal  sins  on  our  side 
that  are  highly  regrettable.  What,  with  metallisms  mono  and  bi,  a  subject 
already  difficult  and  obscure,  has  been  befogged  and  bemuddled  ;  in  fact, 
if  one  were  to  say  bimetallism  =  be-muddle-ism  he  would  not  be  far 
wrong. 

No  doubt,  special  study  is  required  that  one  may  realize,  as,  for  example, 
Bacon  did,  the  "  difference  it  makes  what  a  thing  is  called,"  how  "  words, 
as  a  Tartar's  bow,  do  shoot  back  upon  the  understanding  of  the  wisest, 
and  mightily  entangle  and  pervert  the  judgment  " — how  "  the  ill  and  unfit 
choice  of  words  wonderfully  obstructs  the  understanding" — how  ''words 
plainly  force  and  overrule  the  understanding,  and  throw  all  into  confu- 
sion, and  lead  men  away  into  numberless  empty  controversies  and  idle 
fancies." 

I  doubt  if  any  one  has  used  either  of  these  muddle-isms — mono  or 
bi— ,  much  without  being,  in  appreciable  measure,  "  thrown  all  into  con- 
fusion" by  them,  with  "obstruction  of  the  understanding,"  and  so  led 
away  "into  numberless  empty  controversies  and  idle  fancies." 

If  the  object  were  talk  and  not  action,  confusion  and  not  clearness, 
what  better  reinforcement  could  be  found  ? 

Whoever  assists,  as  I  have  tried  to  do,  to  disinfect  such  words,  gives 


THE    FEDERALIST    POSITION. 

of  Kussia  by  the  great  Napoleon — the  remarkable  thi 
about  which  was  that  it  never  occurred. 

There  have  been  local  Acts,  and  partial  Acts,  of  outlawry 
against  silver,  Acts  which  have  done  more  harm  to  the 
erring  constituency  of  gold  than  to  the  constituency  of  sil- 
ver. But  that  is  all.  It  is  ten  years  since  Germany  gave 
up  trying  to  "  make  soup  out  of  hot  water  alone,"  as  Bis- 
marck described  it,  and  abandoned  her  sale  of  bullion 
made  of  melted  thalers. 

In  closing,  a  word  of  definition  rather  than  argument 
concerning  the  supply  of  silver.  Silver  is  a  money-metal, 
imperishable  and  rare.  The  annual  find  of  new  metal  has 
never  been  more  than  a  minute  fraction  of  the  existing 
stock.  In  spite  of  silver  mares'  nests,  whether  in  Australia 
or  in  the  Americas,  there  is  no  valid  ground  for  expecting 
any  real  revolution  in  the  conditions  of  new  supply,  nor 
even  that  the  fluctuations  of  silver  output  will  equal  those 
of  gold  in  the  past.  Hence  the  stock  in  existence — that  is 
to  say  the  economic  "  supply  " — is  a  limited  supply ;  a 
monopoly  of  nature  not  to  be  broken  down. 

succor  in  spite  of  themselves  to  the  Romeos  of  reform,  who  take  the  po- 
etic view,  and  find  a  less  misleading  name  not  needed  for  a  rose  so  sweet 
as  this,  thereby  most  innocently  forgetting  that  while  it  is  true  "A  rose 
under  any  other  name  would  smell  as  sweet,"  the  sweetness  of  it  is  not 
within  their  jurisdiction.  Their  humble,  prosaic,  and  practical  object  is 
merely  to  persuade  people  in  this  busy  world  to  take  their  cause  on  its 
merits  and  not  believe  it  is  what  its  enemies  say  it  is,  nor  what  their  words 
assist  in  making  it  appear. 

The  point  has  been  settled  by  the  English-speaking  race  in  saying, 
'  Give  a  dog  a  bad  name  and  hang  him.' 


162  SCIENCE    AND    THE    FEDERATION    POLICY. 

II. 
That  Parity  of  Money  is  desirable. 

This  affirmation  is  not  unnecessary,  as  an  unbiased 
mind  might  suppose.  There  are  most  serious  obstacles 
to  logical  thinking  on  this  head.  The  mental  vision  of 
our  time  suffers  largely  from  what  I  will  imagine  an  ocu- 
list calling  "  atrophy  of  the  apparatus  of  accommodation." 
Or  perhaps  one  may  say  that  there  is  normal  sight,  but  it 
is  only  in  spots. 

A  criss-cross  of  premium  or  discount  between  the  moneys 
of  different  centres  of  business  is  recognized  as  an  abomi- 
nation to  the  economic  mind  in  every  professor's  study  in 
the  world,  provided  the  places  are  near  each  other,  as  for 
example  New  York  and  Philadelphia,  or  London  and  Man- 
chester, or  Paris  and  Marseilles.  The  same  truth  has 
vogue  when  applied  to  Paris,  London,  New  York,  and  San 
Francisco.  The  negation  of  such  common  basis,  the  criss- 
cross of  premium  and  discount,  a  kind  of  organized  disorder 
or  Babel  of  valuations — a  financial  St.  Vitus'  dance — is  rec- 
ognized as  a  grave  malady  by  all  regular  physicians.  It  is 
plain  to  all  they  need  a  common  and  stable  basis  for  the 
valuations  through  which  their  business  proceeds.  Here 
there  is  no  help  but  in  parity.  But  beyond  this  range,  dis- 
tance seems  to  bring  confusion  to  the  view.  How  is  it  with 
parity  between  Asia,  Europe,  and  the  Americas  ?  Here, 
for  old-school  professors,  the  light  grows  dim  and  all  signs 


THE    FEDERALIST    POSITION. 

seem  to  fail.  Their  lapse  of  logic  is  as  great  as  if  the  reg- 
ular pharmacopoeia  should  allow  its  prescriptions  to  be 
used  only  for  people  engaged  in  retail  trade. 

III. 

That  it  is  the  Law  of  each  Nation   which   determines 
what  is  Money  in  that  Nation. 

To  a  public  which  has  passed  from  state  bank  notes  to 
silver  certificates  it  is  unnecessary  to  expand  this  thesis. 

IV. 

That  the  Preponderant  Employment -that  is  to  say, 
economic  "  Demand  ''—for  Silver  and  Gold  is  an  effect 
of  the  Laws  of  Nations. 

This  is  a  simple  corollary  of  the  preceding.  To  one 
who  is  disturbed  by  the  contrast  between  use  in  the  arts, 
and  monetary  use,  and  attracted  by  the  subtleties  of  cau- 
sation and  of  motive,  I  can  briefly  suggest  two  queries.  Do 
legislatures  make  certain  material  legal  tender  because 
individuals  like  certain  kinds  of  ornament  ?  Do  not 
individuals  choose  ornament  in  part  because  of  the 
costliness  of  the  material,  and  of  its  immediate  converti- 
bility into  money  ? 

Y. 

That  Monetary  Laws  establish  Parity. 

In  establishing  money  of  different  kinds  or  denomina- 
tions, such  laws  invariably  seek  to  determine  the  relation 
of  these  kinds  or  denominations.  If  they  are  wise  laws 
they  succeed.  A  law  which  makes  twenty-dollar  notes 
and  one-dollar  notes  equally  legal  tender,  effects  an  equa- 


164  SCIENCE    AND    THE    FEDERATION    POLICY. 

tion  between  twenty  ones  and  one  twenty.  If  one  denom- 
ination were  made  convertible  and  legal  tender,  while  the 
other  is  neither  convertible  nor  legal  tender,  the  nominal 
equation  is  likely  to  be  falsified  by  a  discount  on  the  one 
or  a  premium  on  the  other. 

VI. 

That  permanent  Parity  between  Silver  and  Gold  is  pro- 
ducible by  a  proper  Keg'ulation  of  their  ICmploymeiit. 

As  has  been  stated,  the  stock-in-existence — that  is  to 
say,  the  economic  "  supply  " — is  limited  by  nature.  To 
regulate  the  relative  "  demand  "  is  to  regulate  their  relative 

value. 

VII. 

That  concurrent  Laws  for  legal  Equality  of  the  Metals 
in  an  effective  Majority  of  Nations  will  establish  Parity 
outside  as  well  as  within  their  direct  Jurisdiction. 

It  is  the  "law  of  supply  and  demand"  which  operates 
as  a  guarantee  of  the  equation. 

If  the  great  Powers  and  their  probable  allies  give  legal 
equality  to  silver  and  gold  (of  course  at  the  same  ratio) 
their  parity  at  points  outside  of  the  direct  jurisdiction  of 
these  nations  cannot  be  prevented,  except  by  an  alteration 
of  human  nature,  leading  men  to  prefer  loss  to  gain. 
There  may  be  fluctuations  of  "  exchange,"  but  that  does 
not  affect  parity. 

Ample  experience  also  justifies  the  averment.  In  late 
centuries  the  fluctuations  of  relative  value  were  fluctu- 
ations within  the  range  of  effective  legal  ratios.  In  this 


THE    FEDERALIST    POSITION.  165 

century,  so  long  as  the  Mint  of  Paris  was  open  (before 
1873)  there  has  been  substantially  parity  at  Paris,  and  the 
local  fluctuations  elsewhere  were  chargeable,  substantially, 
to  "  exchange  "  on  Paris.  I  say  "  substantially  "  to  make 
room  for  dealing  fully  with  misapprehensions  current  in 
relation  to  this  point.  Without  entering  into  detail  I  will 
briefly  mention  that  I  have  discovered  the  proof  that 
standard  gold  bullion  has  fluctuated  in  London  in  this 
century  as  against  standard  gold  coin. 

VIII. 

That  such  Parity  benefits  each  Nation  by  assuring1  com- 
parative stability  to  the  valuations  in  which  it  is  inter- 
ested. 

The  benefit  applies  in  various  directions  and  degrees  in 
different  nations,  but  there  is  something  like  equality  in 
the  shares  of  the  nations  in  this  benefit,  because  of  an 
equality  in  the  ratio  of  such  benefit  to  the  total  economic 

interests  of  the  nation. 

IX. 

That  Federation  is  a  condition  and  a  guarantee  of  such 
concurrent  laws  replacing-  those  which  now  maintain 
disparity. 

This  natural  view,  which  guided  the  Government  of  the 
United  States,  and  afterwards  that  of  France,  in  approach- 
ing other  nations  on  the  subject,  is  supported  by  the  sub- 
sequent inaction  of  nations.  Each  is  unwilling  to  move 
without  the  other,  and  it  is  only  accord  which  will  make  it 
safe  to  break  the  vicious  circle. 


166  SCIENCE    AND    THE    FEDERATION    POLICY. 


X. 

That  the  paramount  monetary  issue  of  the  ag*e  is  whether 
a  settlement  on  this  basis  should  be  made. 

There  is  no  alternative  to  this  settlement,  which  under 
the  guarantees  of  federation  gives  parity  through  concur- 
rence of  laws,  other  than  the.  perpetuation  of  the  evils  of 
that  instability  in  the  foundations  of  business  and  invest  - 
ment  whereof  mankind  has  had  ampler  experience  since 
1871  than  at  any  period  since  the  Thirty  Years  War.  The 
mere  delay  fostered  by  opposition  to  settlement  creates 
new  obstacles  to  settlement.  The  opponents  of  the  feder- 
ation policy  are  in  a  double  sense  friends  of  disorder. 


THE    DIS-UNIONIST    POSITION.  16' 


THE  DIS-UNIONIST  OR  ANTI-FEDERALIST  POSITION. 

Those  who  oppose  the  growth  of  opinion  in  favor  of 
Federation  may  be  conveniently  classified  as  follows  : 

First  Grouping. 

Those  who  have  learned  only  a  part  of  the  truths  hith- 
erto set  forth. 

Those  who  have  refused  to  learn  any  of  these  truths. 

Second  Grouping. 

Those  who  think  the  federation  project  will  never  be 
adopted,  chiefly  because  of  the  expected  continuance  of 
England's  refusal  to  co-operate. 

Those  who  think  the  federation  would  not  maintain 
parity  between  the  two  metals  even  if  England  were  to  co- 
operate, with  free  coinage  of  an  English  Silver  Dollar. 

I  hope  that  my  friends  in  the  dis-unionist  camp  will  find 
nothing  to  offend  them  in  this  classification.  One  who  has 
been  militant,  as  I  have  for  so  many  years,  naturally  at- 
tains what  I  may  call  a  certain  perspective  in  regarding  the 
position  of  his  "  friends  the  enemy  ;  "  and  their  Parthian 
campaign  of  retreat  has  been  full  of  instruction.  In  fair- 
ness I  may  confess  that  the  key-note  of  what  I  have  been 
saying  was  given  me  by  one  of  the  highest  names  in  the 
camp  of  the  opposition  and  in  the  literature  of  money,  for 


168          SCIENCE    AND    THE    FEDERATION  POLICY. 

Michel  Chevalier  is  among  the  prophets  for  all  who  have 
a  monetary  faith.  It  was  by  another  anti-silver  champion, 
I  should  add,  by  Esquirou  de  Parieu,*  the  economic  ad- 
viser of  Napoleon  III.  and  father  of  the  Latin  Union, 
that  I  was  introduced  to  Chevalier.  The  distinguished 
author  of  the  first  great  Treatise  on  Money  said  to  me, 
"You  will  never  succeed  in  converting  England^  The 
prophesy  was  made  in  the  Institute,  at  the  close  of  a 
meeting  of  the  Academy  of  Moral  and  Political  Sciences, 
at  which  he  had  presided.  I  did  not,  however,  relax  my 
labors  amid  the  foundations  of  monetary  science. 

On  other  pages  the  reader  will  find  material  bearing 
upon  Chevalier's  forecast :  in  the  references  to  the  various 
stages  of  growth  of  the  Silver  movement  in  England,  and 
an  account  of  its  strength  in  1889. 

*  MAKIE  Louis  PIERRE  FELIX  ESQUIROU  DE  PARIEU  (b.  1815),  member  of 
the  Institute  of  France,  Deputy  in  1848,  Minister  in  President  Napoleon's 
Cabinet  (1849-'51;,  head  of  the  Council  of  State  (1855-'70),  member  of 
the  Ollivier  Cabinet  (1870),  Senator  (1876).  His  principal  work  is  a 
Treatise  on  Taxation  (Paris,  5  vols.,  1862). 

His  numerous  contributions  to  monetary  discussion  gave  impulse  to  the 
movement  for  the  unification  of  coinages  in  connection  with  the  metric 
system,  and  are  among  the  main  forces  which  led  to  the  anti-silver  de- 
cisions of  the  International  Monetary  Conference  of  1867,  of  which  he 
was  the  guiding  spirit  and  virtual  President. 

Had  the  Latin  Union,  or  had  France,  gone  on  in  the  path  he  marked 
out,  the  mintage  of  silver  would  have  been  stopped  before  the  war  with 
Prussia  or  Germany.  An  interesting  field  of  surmise  is  opened  by  the 
query,  how  this  measure  would  have  affected  Germany. 

His  Keport  summing  up  before  the  Conference  the  results  of  its  pro- 
ceedings is  reprinted  in  full  in  the  Appendix. 


VI. 


BULLION    OR    COIN? 


BULLION  OK  COIN? 

It  has  been  brought  to  my  attention  that  certain  Eng- 
lish journals  (December,  1889),  in  discussing  Mr.  Win- 
dom's  proposals  to  substitute  Bullion  for  Coin  as  the  basis 
of  our  increasing  paper  issues,  assume  a  lofty  tone  of  criti- 
cism, and  this  fact  has  suggested  to  me  that  pages  from 
my  portfolio  might  assist  in  covering  a  certain  deficit  in 
the  stock  of  learning  available  for  the  general  public. 

In  this  country  there  are  symptoms  in  some  quarters  of 
a  sense  of  dread,  growing  out  of  the  novelty  of  the  measures 
proposed  to  Congress,  while  in  other  quarters  objection 
and  opposition  announce  themselves,  which  can  perhaps 
be  fairly  described  as  arising  from  a  sense  of  injured 
pride,  as  if  the  national  silver  dollar  were  threatened 
with  disrespectful  treatment.  The  examination  which  I 
propose  may  therefore  naturally  take  form  in  the  query  : 
How  is  the  "future  of  the  silver  dollar  "  to  be  affected  by 
ceasing  to  coin  it  and  using  bullion  in  its  place  f 

This  form  of  query  will,  perhaps,  most  simply  indicate 
the  standpoint  which  people  in  this  country  generally  will 
take  in  looking  at  the  subject.  The  silver  dollar  is  a  rally- 
ing point,  a  watchword,  a  formula  of  faith,  for  many  minds, 
notably  in  the  Mississippi  Valley  and  in  the  Mountain 
States,  and  any  apparent  attack  upon  it  must  undergo 
most  jealous  scrutiny. 

171 


172  BULLION    OR    COIN? 

I  shall  make  no  attempt  to  anticipate  the  various  lines 
of  criticism,  on  matters  of  detail,  of  the  Bill  to  be  discussed 
by  Congress,  which  would  serve  as  response  to  the  above 
query.  Indeed,  I  pass  by  important  subjects  of  discussion 
which  suggest  themselves,  and  restrict  myself  to  the  bare 
general  issue  which  makes  the  title  of  this  paper. 

My  effort  is  to  set  forth  general  truths,  in  view  of  which 
it  is  well  that  the  discussion  should  proceed. 

(1.)  It  is  futile  to  treat  the  silver  dollar  independently  of 
silver  itself. 

I  am  aware  of  the  temptation  this  subject  exerts  upon 
subtle  minds,  offering  a  field  of  distinction  as  delicate  as 
the  law,  if  not  indeed  as  fine  as  old-time  metaphysics. 
I  shall  say  naught  in  disparagement  of  the  process  of  ab- 
straction, which  peels  down  concepts  by  gradations  as 
fine  as  the  outer  skin  of  an  onion  ;  for  it  may  be  as  useful 
to  a  thinker,  as  to  a  microscopist,  to — 

Distinguish  and  divide, 

A  hair  twixt  south  and  southwest  side. 

But  there  are  regions  of  discussion  where  such  niceties 
are  out  of  place,  and  seriously  impede  the  understanding. 
The  hotspur  partisan  of  silver  denies  the  "depreciation" 
of  silver,  and  is  justified,  so  far  as  a  part  of  what  the  gold 
fanatic  means  by  depreciation,  is  concerned.  There  is  a 
factitious  '  appreciation  '  of  gold.  Yet  it  is  a  fact.  To  ex- 
plain how  it  was  brought  about  does  not  abolish  the  why 
and  the  wherefore  of  its  continuance  as  fact. 

T  have  in  other  pages  told  my  story  of  the  course  of 


THE    CHANGED    POSITION    OF    SILVER,  173 

'  fructifying  causation,'  whereof  the  present  condition  of 
monetary  systems  is  the  outcome  ;  how  enthusiasm  for  met- 
rical reform  found  no  scholarship  nor  statesmanlike  grasp 
of  the  teachings  of  experience  to  restrain  the  effort  to 
unify  the  '  world's  measure  of  values  '  by  abolishing  what 
seemed  a  mere  disturbing  element,  the  silver  unit.  In 
the  gradual  recognition  of  the  suicidal  character  of  this 
effort,  reformers,  scholars,  statesmen,  have  since  found 
occupation.  But  however  unfortunate  the  error  proved — 
for  Europe  as  well  as  for  this  country — still  these  Euro- 
pean laws  which  made  the  silver  question  were  passed. 

The  esteem  in  which  silver  was  held  relatively  dimin- 
ished ;  the  esteem  in  which  gold  was  held  increased.  What- 
ever distinctions  are  made  with  ap-  and  6/6-preciation, 
there  is  no  doubt  that  it  was  silver  which  went  down  re- 
latively, and  gold  which  went  up.  To  refuse  this  fact  a 
recognition  of  any  share  of  its  importance  is  to  repeat  the 
error  of  the  panegyrist  who  too  zealously  based  the  praise 
of  his  hero  upon  battles  which  he  would  have  won  if  he 
had  not  been  prevented  by  the  enemy.  In  such  an  under- 
taking a  keen  sense  of  humor  assists  in  sharpening  the 
perception  of  facts. 

So  far  as  the  future  of  the  silver  dollar  of  Hamilton  and 
Gallatin  is  involved  in  the  broader  question  of  the  relative 
monetary  rank  which  silver  has  in  fact  lost,  but  which  will 
be  restored  to  it  when  the  agitation  and  education  in 
Europe  elsewhere  referred  to  in  this  volume  shall  have 
done  their  work — this  point  will  be  briefly  touched  in 
other  pages. 


174  BULLION    OR    COIN? 

I  now  turn  to  another  vital  fact  which  bears  directly 
upon  the  question  here  at  issue. 

(2.)  The  people  of  the  United  States  do  not  take  to  the 
silver  dollar  very  kindly.  They  do  not  seem  to  want  more 
than  one  apiece,  per  capita,  for  their  pockets,  their  tills, 
and  their  strong-boxes.  They  persist  in  "  treating  Silver 
as  a  commodity"  to  borrow  a  very  vague  term  for  a  very 
plain  use. 

However  inconvenient  this  fact  may  be,  it  can  only  be 
dealt  with  as  a  fact.  It  is  futile  to  try  to  explain  it  away. 
The  fact  is  fact.  Silver  certificates  are  not  silver  dollars, 
and  can  no  more  be  made  into  silver  dollars  than  orange- 
peel  water  can  be  made  into  wine  by  stress  of  imagination. 
Silver  dollars  have  been  within  reach  for  eleven  years. 
Halves  and  quarters  have  been  within  reach  still  longer. 
Yet  there  are  twenty-two  millions  of  silver  change  that 
have  been  losing  interest  for  many  years  as  a  "dead  asset" 
in  the  Treasury  ;  a  melancholy  monument  of  the  days  of 
callowness  and  inadvertence  when  the  United  States 
Congress  was  assisting  the  demonetization  of  German 
silver.  I  have  never  heard  that  the  Treasury  has  inter- 
posed any  obstacles  in  the  way  of  a  demand  for  silver  dol- 
lars, as  compared  with  other  current  money.  We  must  ac- 
cept the  books  of  the  Treasury  as  a  record  of  the  people's 
will.  In  the  last  four  years  there  have  been  about  sixty 
millions  of  silver  dollars  in  the  hands  of  the  people.  I 
know  of  no  indication  that  a  change  of  habit  is  to  enlarge 
the  use  of  them. 


WHY    NOT    LEAVE    SILVER    UNMINTED  ?  175 

I  am  glad  to  believe,  however,  that  such  an  increase  is  pos- 
sible. It  can  hardly  be  affirmed  with  certainty  that  we  have 
reached  the  saturation  point  in  reference  to  silver  coin,  or 
that  measures  may  not  be  devised  to  promote  the  further 
popular  use  of  coin.  The  subject  merits  attention  greater 
than  it  appears  to  have  received.  In  referring  to  it  I  take 
occasion  to  make  my  reservations,  and  disclaim  any  opinion 
adverse  to  extending  the  use  of  coin.  Whether  the  greater 
use  of  coin  (both  gold  and  silver)  in  Germany  and  in  France 
stands  in  connection  with  the  thriftiness  of  Germans  or 
Frenchmen  is  a  subject  that  will  bear  study.  It  appears 
probable  that  the  use  of  coin,  and  to  some  extent  the  hoard- 
ing of  coin,  especially  by  that  vast  majority  of  the  popula- 
tion that  lives  by  manual  labor,  tends  to  promote  thrift  in 
the  individual,  as  well  as  to  support  sound  finance  in  the 
government. 

In  dealing,  however,  with  the  monetary  use  of  silver 
coin  it  is  important  to  recognize  the  marked  peculiarities 
of  our  system  in  reference  to  gold.  The  gold  in  the 
Treasury  as  stated  for  July  1,  1889,  consisted  of  186  mil- 
lions belonging  to  the  Treasury,  and  117  millions  ware- 
housed therein  for  the  benefit  of  those  who  use  gold  cer- 
tificates ;  and  65  millions  of  the  total  sum  were  in  bullion. 

Why  not  leave  silver  unminted  as  well  as  gold  ? 

For  any  possible  change  of  habit  in  the  direction  of 
extended  use  of  silver  dollars,  the  existing  stock  of  them 
is  already  a  superabundant  provision.  If  we  take  the  ex- 
treme supposition  of  a  change  in  the  habit  of  the  people 


176  BULLION    OR    COIN? 

which  should  double  their  absorption  of  these  coins,  there 
would  still  be  left  in  existence,  beyond  its  requirement, 
over  two  hundred  millions  of  them. 

Why  should  the  people  be  taxed  to  pay  for  minting 
more  dollars  ?  The  minting  has  cost  some  millions 
of  dollars,  and  it  certainly  seems  probable  that  money 
could  be  expended  in  some  other  way  to  better  advantage. 

The  terms  of  Mr.  Windom's  proposition  and  the  facts 
just  referred  to  seem  to  narrow  the  issue  to  the  query :  Is 
it  not  worth  while  to  omit  minting  coin  which,  when  minted, 
will  be  used  as  bullion  f 

This  apparent  confusion  of  the  two  ideas  which  we  have 
hitherto  kept  separate,  will  be  useful  if  it  serves  as  an  oc- 
casion for  defining  them.  It  is  perhaps  very  easy  to  ig- 
nore or  forget  that  coin  may  be  bullion,  though  bullion  is 
not  coin.  The  difference  of  meaning  here  is  but  one  degree 
removed  from  that  which  constitutes  a  mare  a  horse, 
though  a  horse  is  not  a  mare.  Coin  is,  in  fact,  sub- 
divided bullion — bullion  of  legal  fineness  duly  certified. 
If  it  lie  in  a  vault,  the  bullion  use  of  it  predominates.  If  it 
pass  from  hand  to  hand,  the  coin  use  is  in  the  ascendant. 

Passing  now  to  another  distinction,  I  observe  that  Avhile 
coin  is  money  by  tale,  and  bullion  is  potential  money  by 
weight,  bullion  may  also  be  really  money,  effectively  money, 
if  the  law  so  provide.  The  law  provides  for  turning  bul- 
lion into  coin,  for  its  purchase  or  its  exchangeability,  and 
it  can  also  give  it  directly  the  power  of  paying  debts.  I 
am  not  aware  that  it  has  ever  been  done,  but  it  is  possible 
to  make  ingots  full  legal  tender  under  proper  regulations. 


THE    USE    OF    CERTIFICATES.  177 

The  advantages  of  paper, 

So  far  as  the  safety  and  security  of  the  proposed  paper 
representatives  of  the  deposited  bullion  are  concerned,  it 
is  a  notable  fact  that  in  this  country,  by  favor  of  the  con- 
fidence which  the  manifold  guarantees  of  our  financial 
system  inspire,  the  element  "  credit  "  seems  to  disappear. 
Confidence  is  so  complete  that  it  is  easy  to  forget  that  it 
exists.  The  acceptance  of  a  Government  receipt  for  ware- 
housing money-metal,  resembles  accepting  a  valid  transfer 
of  title  to  immovable  property  in  the  place  of  manual  appro- 
priation arid  possession.  So  strong  is  this  confidence  that 
the  analog}'  of  "  livery  of  seisin  "  suggests  itself ;  an  illus- 
tration which  the  layman  will  find  no  difficulty  in  follow- 
ing when  he  reflects  how  the  deed  that  was  done  when  John 
Doe  handed  to  Richard  Roe  a  clod  from  the  field  he  was 
selling  him,  is  the  predecessor  of  the  paper  deed  which  in 
these  days  is  made  to  "do" — much  to  the  relief  of  the 
modern  John  and  Richard. 

Of  the  advantages  which  the  use  of  paper  offers,  when 
thus  made  a  plenipotentiary  representative  of  money-metal, 
some  are  sufficiently  obvious,  others  are  less  likely  to  be 
known,  and  some,  indeed,  can  hardly  be  said  to  be  always 
appreciated  even  by  those  regarded  as  conversant  with 
such  matters. 

So  far  as  the  objections  to  the  use  of  paper  are  con- 
cerned (including  the  expense)  it  should  be  very  clearly  un- 
derstood that  the  issue  at  present  under  consideration 
does  not,  strictly  speaking,  involve  that  side  of  the  ques- 
tion, for  the  contrast  to  be  drawn  is  merely  between  cer- 


178  BULLION    OR    COIN? 

tificates  based  upon  coin  and  certificates  or  notes  based 
upon  bullion. 

Of  the  advantages  of  paper,  I  mark  under  the  first  head 
above  referred  to,  the  ease  of  carriage,  and  the  relief  given 
from  the  necessity  of  counting  or  weighing.  An  advan- 
tage less  likely  to  attract  attention  is  the  ease  of  identifica- 
tion of  ownership.  These  several  advantages  belong 
equally  to  the  two  kinds  of  paper  under  consideration. 

Paper  based  on  bullion. 

Beside  these  is  to  be  noted  in  favor  of  the  use  of  bul- 
lion, the  saving  of  expense  by  not  minting. 

If  we  inquire  for  objections  here  we  shall  find  that  under 
prudent  management  no  inconvenience  can  arise,  for  the 
source  from  which  danger  could  come,  under  existing  cir- 
cumstances, is  the  improbable  event  of  sudden  and  ex- 
treme panic,  in  which  the  timid  would  seek  possession  of 
their  money-metal  and  would  be  embarrassed  in  their 
efforts  to  use  it  for  payments. 

The  friction  of  coin  against  coin,  making  wear  and  tear 
which  goes  on  till  the  coin  has  to  be  reminted,  may  occur 
when  coin  is  in  transit,  when  it  is  moved  in  a  bag,  as  well 
as  when  it  is  handled  or  carried  in  the  pocket.  Bullion 
can  be  shipped  not  only  with  more  convenience  but  with 
less  abrasion  than  coin. 

Again,  bullion  is  used  by  weight.  The  scales  are  better 
adjusted  than  in  the  case  of  coin.  Here  we  touch  the 
source  of  subtleties,  to  which  no  doubt  in  all  the  centu- 
ries of  man's  experience  money  has  given  rise  ;  one  of  the 


THE    ADVANTAGES    OF    USING    BULLION.  179 

'  mysteries  of  money.'  Indeed,  how  can  the  mystery  be 
penetrated  when  we  realize  that  '  coin  is  something  that 
always  ought  to  be,  yet  rarely  or  never  is,  but  at  the  same 
time  is  taken  as  if  it  were  what  it  ought  to  be,'  and  that 
this  puzzle  is  fact  in  all  monetary  systems  by  force  of  enact- 
ment, whether  it  be  decree  of  autocratic,  or  statute  of  rep- 
resentative government ! 

There  is  an  ideal  fineness  of  metal,  or  proportion  be- 
tween the  precious  metal  and  the  alloy,  and  an  ideal  weight 
of  metal  of  the  proper  fineness.  But  the  processes  of  mint- 
age do  not  often  attain  the  desired  ideal  perfection,  and 
the  law  gives  tolerance  for  error  within  certain  limits, 
which  in  the  quaint  language  of  the  coiner's  art  are  termed 
the  "remedy;"  remedy  above  and  remedy  below,  within 
which  limits  the  coin  is  accepted  as  if  it  were  of  the  true 
weight  and  fineness.  To  this  slight  variation  is  added  the 
reduction  of  weight  which  normal  wear  and  tear  or  artifi- 
cial processes  can  produce.  And  for  this,  laws  and  cus- 
tom also  give  a  limited  tolerance.  Thus  is  offered  a  field 
for  little  speculations  which,  when  multiplied,  may  play  a 
greater  part  in  the  business  world  than  economists  find 
it  easy  to  trace  or  measure. 

In  the  use  of  bullion  the  scales,  as  I  said,  can  be  more 
consistently  applied,  and  so  at  least  a  part  of  the  uncer- 
tainties and  difficulties  of  the  use  of  coin  be  avoided. 

It  may  be  not  without  interest  to  enter  upon  a  brief 
examination  of  past  experience  relating  to  preferences  of 
policy  as  between  bullion  and  coin.  Suggestive  lines  of 


180  BULLION    OK    COIN? 

contrast  between  earlier  times  and  ours  in  this  regard,  will 
be  found,  as  it  were,  to  cross  eacli  other. 

Bullion  in  banks. 

In  the  early  history  of  banking,  developed  as  it  was  to 
meet  the  need  of  trade  beyond  the  local  jurisdiction,  a  trade 
which  we  should  now  call  *  international,'  bullion  value 
was  necessarily  looked  to  as  security  rather  than  the  cur- 
rency of  coin  for  which  the  guarantee  was  local  and  limited. 
This  would  apply  as  a  general  statement  to  the  various 
precursors  of  our  modern  banks  in  the  Italian  Republics, 
in  the  Free  Cities  of  Germany  and  the  Low  Countries, 
and  to  the  English  goldsmith,  of  whose  notes  the  English 
bank-note  is  the  successor.  When  a  new  departure  was 
taken  at  the  close  of  the  XYIIth  century,  by  the  founding 
of  a  national  "  Bank  of  England,"  which  has,  in  some  meas- 
ure, served  as  a  model  for  banking  systems  in  other 
countries,  its  charter,  which  prohibited  dealing  in  all  other 
goods,  made  gold  and  silver  bullion,  as  well  as  bills  of 
exchange,  the  staple  of  the  enterprise.  Gold  and  silver 
bullion  still  remain  the  lawful  basis  of  the  notes  which 
modern  English  legislation  has  made  legal  tender  between 
citizens,  so  long  as  they  remain  convertible.* 

The  policy  of  Seigniorage. 

The  familiar  antithesis  between  popular  rights  and  priv- 
ilege maintained  by  arbitrary  power,  finds  its  parallel  in 


*  The  act  of  1844  limited  the  amount  of  silver  in  the  Issue  Department 
to  one-fourth  the  gold — one  part  of  silver  to  four  parts  of  gold.  Since 
the  Gold  Discoveries  no  use  has  been  made  of  this  privilege. 


THE    SEIGNIORIAL    SYSTEM.  181 

the  contrast  between  the  seigniorial  system  and  free 
mintage.  The  right  of  a  citizen  to  have  his  bullion  turned 
into  coin  without  denial  or  delay  was  established  by  the 
English  Parliament  in  1666,  along  with  the  principle  of 
gratuitous  mintage,  to  which  I  shall  presently  allude.  The 
policy  of  Princes,  however,  operated  in  the  main  in  the 
same  direction  under  the  seigniorial  system,  as  freedom 
of  mintage  under  the  popular  system.  It  was  the  interest 
of  Princes  to  coin  as  much  as  possible,  in  order  to  recruit 
their  finances  by  seigniorage.  The  percentage  of  bullion 
thus  gained  meant  not  only  pocket-money  for  the  seignior, 
the  Lord  of  the  Mint,  but  the  means  of  carrying  on  the 
State. 

The  confusion  arid  injury  thus  imposed  upon  business 
interests  will  be  recognized  when  it  is  seen  that  coins 
thereby  acquired  a  local  currency  value  far  beyond  the 
value  of  the  metal  they  contained,  while  the  bullion  value 
remained  of  necessity  preponderant  in  the  calculations  of 
international  trade.  Thus  the  power  of  turning  bullion 
into  cash  could  be  used  as  an  instrument  of  oppression 
as  well  as  of  speculation  by  the  favored  courtier  to  whose 
hands  it  fell. 

Gratuitous  Mintage. 

The  principle  of  gratuitous  mintage,  though  not  yet 
generally  accepted,  tends  to  impose  itself  in  our  time.  It 
has  a  curious  history.  While  the  motive  for  adopting  it 
in  England  in  1666,  the  time  of  its  first  appearance  in 
modern  law,  seems  to  have  been  to  promote  an  enlarge- 


182  BULLION    OR    COIN? 

ment  of  the  circulation  by  inducing  citizens  to  bring  their 
bullion  to  the  mint,  yet  the  underlying  theory  of  it  is  a 
subtle  truth  intimately  interwoven  with  the  very  nature 
and  purpose  of  the  venerable  institution  of  money. 

It  is  this  :  that  money  should  be  good  wherever  it  goes, 
and  equally  good  in  all  places ;  worth  as  much  in  one 
place  as  another.  But  if  coin  is  to  be  worth  as  much  in 
one  place  as  another,  its  value  should  be  its  bullion  value, 
the  value  of  the  metal  of  which  it  is  made.  To  accomplish 
this  result,  the  coining  must  be  done  gratuitously :  for  if 
there  be  a  charge  paid  for  the  coining,  the  coin  is  worth 
more  than  the  metal,  at  least  at  the  place  of  minting. 
Hence  the  state  which  maintains  the  mint  must  assume 
the  burden  of  minting  without  charge  ;  the  taxpayer  thus 
assuming  a  burden  which  "  naturally "  would  fall  upon 
the  bullion-owner. 

My  remark  that  gratuitous  mintage  has  a  curious  his- 
tory will  be  justified  when  the  reader  learns  that  this  sim- 
ple statement  with  which  I  venture  to  think  he  will 
find  it  not  very  difficult  to  concur,  is  but  an  amplification 
of  the  dicta  of  leading  jurists  of  the  Middle  Ages.  I 
I  have  traced  this  doctrine  to  them;*  and  far  beyond 
them  I  found  its  source  in  the  Roman  law.  If  I  put  the 
Roman's  theory  into  the  language  of  to-day,  I  may  say 
it  means  "  the  internationally  of  coin." 


*The  statement  of  this  discovery  is  set  forth  in  "  Monetary  History  anl 
Monetary  Jurisprudence,"  an  address  before  the  British  Association  for 
the  Advancement  of  Science,  at  Manchester,  September,  1887. 


FREE    SALE    OF    BULLION.  183 

The  principle  is  now  generally  accepted  to  the  limited 
extent  of  abolishing  seigniorage,  but  the  cost  of  coinage 
is  still  very  generally  charged  to  the  depositor.  France 
has  reduced  her  charge  several  times  in  this  century,  but 
still  charges  for  coining  gold,  and  when  she  coined  silver, 
charged  more  ad  valorem  than  for  gold.  In  India  there 
is  a  heavy  charge  for  coining  rupees,  a  part  of  which 
should  perhaps  be  really  counted  as  seigniorage.  In  this 
country  we  maintained  a  coinage  charge  for  a  limited 
period. 

Free  Sale  of  Bullion. 

It  will  be  seen  upon  reflection  that  a  system  of  obliga- 
tory purchase  of  bullion,  which  I  shall  name  "  Free  Sale 
of  Bullion,"  in  which  the  full  value  is  given  in  current 
money,  is  the  fullest  possible  application  of  the  princi- 
ple that  underlies  both  free  mintage  and  gratuitous 
mintage.  There  is  no  time  lost  in  mobilizing  bullion 
into  current  money.  The  system  introduced  by  the 
statute  of  1666  leaves  a  little  loss  of  interest  to  be 
borne  by  the  depositor,  namely,  interest  for  the  time 
taken  in  manufacturing  the  coin,  the  length  of  which  must 
depend  upon  the  convenience  of  the  operation  of  the 
mint.  This  loss  is  fixed  by  a  modern  English  statute, 
for  gold,  at  three  half  pence  per  sovereign.  The  Bank  is 
compelled  to  pay  £3  17s.  9d.,  for  the  ounce  of  gold  which 
is  worth  £3  17s.  lO^d.  Our  statute  of  1792  charged  half 
a  cent  per  dollar,  if  both  the  depositor  and  mint  director 
desired ;  which  suggests  the  query  whether  the  Treasury 


184  BULLION    OK    COIN? 

of   those   days  had  the   cash   on   hand  for  its  "  Bullion 
Fund." 

Free  Mintage,  Gratuitous  Mintage,  and  Free  Sale  of 
Bullion. 

We  are  now  prepared  to  mark  the  relation  and  distinc- 
tions between  free  mintage,  gratuitous  mintage,  and  free 
sale  of  bullion. 

Free  Mintage  is  of  the  first  importance.  The  right  of 
the  owner  of  bullion  to  have  it  turned  into  coin  is  a  right 
of  primary  and  fundamental  import  as  establishing  the 
legal  status  of  money-metal.  Gratuitous  Mintage  is  of 
subordinate  rank  ;  for  mintage  may  be  free  and  bullion 
thus  become  potential  money,  in  the  full  sense  of  the 
phrase,  whether  the  cost  of  minting  it  be  paid  by  the 
owner  or  by  the  State.  As  I  have  indicated,  Gratuitous 
Mintage  is  a  practice  still  foreign  to  important  monetary 
systems,  while  Free  Mintage  is  generally  established.'"" 

It  will,  I  think,  be  recognized  that  a  right  of  Free  Sale 
of  Bullion,  as  I  have  called  it,  is  entitled  to  a  distinct  place 
in  our  classification,  though  I  do  not  recall  ever  having 
heard  of  it,  or  read  of  it  in  monetary  books. 


*Here  I  may  properly  explain  that  the  adjective  "  free  "  has  been  ap- 
plied in  authoritative  works,  as  including  Gratuitous  Mintage  as  well  as 
Free  Mintage  in  the  sense  above  defined,  aud  that  I  have  done  what  I 
could  to  promote  clear  thinking  by  seeking  to  naturalize  the  above  dis- 
tinctions in  the  language  of  money.  It  is  evident  that  the  two  ideas  are 
distinct  in  their  nature,  and  that  nothing  but  confusion  can  be  gained  by 
fusing  them  under  one  word. 


MONETARY  POLICY  IN  THE  FUTURE.      185 

Free  Sale  of  Bullion  has  existed  in  various  countries 
in  a  special  form,  as  a  concomitant  or  arrangement  of  con- 
venience incidental  to  a  system  of  Free  Mintage,  as  for  ex- 
ample, when  the  Mint  (or  a  Bank)  is  bound  to  pay  for  the 
bullion  at  once  upon  accepting  it  for  mintage.  In  the  in- 
stances lately  referred  to,  a  fixed  charge  was  deducted  to 
cover  the  advantage  in  time  and  convenience  thus  given 
the  bullion  owner  at  the  expense  of  the  Mint.  The  Free 
Sale  of  Bullion  produced  in  this  country,  which  is  now 
proposed  for  the  action  of  Congress,  is  free  from  this 
-deduction. 

Monetary  Policy  in  the  future. 

These  several  lines  of  historical  development  seem  to 
converge  toward  the  following  policy  : 

The  establishment  (by  enactment  and  not  merely  by 
favor  of  administrative  discretion),  of  the  right  of  free 
mintage,  and  of  gratuitous  mintage  ;  the  actual  amount  of 
mintage  performed  by  Government  in  obedience  to  this 
rule  being  limited  by — 

The  establishment  of  the  right  of  free  sale  of  bullion  ; 
the  monetary  use  of  this  bullion  being  secured  by — 

The  establishment  of  a  system  of  paper  representatives, 
which  circulate  as  money,  transferring  the  title  to  the  bul- 
lion deposited. 

I  state  the  idea  in  general  terms  which  are  applicable 
to  such  various  forms  of  paper  issue  and  conditions  of 


186  BULLION    OR    COIN? 

redemption  as  may  suit  the  respective  convenience  of  the 
several  monetary  systems  in  which  the  principles  above 
stated  might  be  adopted.  I  also  withhold  any  statement 
of  detail  as  to  amounts  and  price — which  in  presence  of 
the  existing  general  outlawry  of  silver  are  vital  questions, 
so  far  as  that  metal  is  concerned — and  likewise  the  condi- 
tions to  be  fixed  under  which  bullion  would  be  received ; 
as  for  example,  the  place  of  receipt,  or  the  composition  of 
the  metal,  whether  it  is  already  ascertained,  or  to  be  ascer- 
tained, or  of  coinable  fineness,  or  of  fineness  held  to  be,  in 
various  degrees,  "  suitable  to  the  operations  of  the  mint." 

It  seems  apparent  that  speaking  generally,  the  trend  of 
habit  in  the  Western  World  is  toward  the  policy  I  have 
outlined.* 

There  is,  as  I  have  indicated,  no  full  acceptance  of  such 
policy  on  the  part  of  any  nation  to-day.  Habits  and  in- 
stitutions change  slowly,  and  it  would  be  bold  prophecy  to 
aver  that  the  general  adoption  of  this  policy  is  near  at 
hand.  I  merely  aver  that  the  tendency  is  in  that  direction. 

Is  there  good  ground  for  solicitude  on  this  account,  or 
any  general  ground  for  opposition  to  this  tendency  ?  I 
see  none. 

*  I  say  nothing  here  of  the  expanding  use  of  coin  in  a  community  that 
has  not  known  it  before  ;  as  for  example,  Africa,  or  the  Pacific  Islands;  nor 
do  I  propose  to  speak  of  Asia,  nor  venture  on  the  great  "  Chinese  puz- 
zle "  of  money — the  puzzle  of  Chinese  money — sycee,  '  cash,'  and  foreign 
dollars,  and  the  tael,  and  a  mint  under  the  banner  of  the  Green  Dragon. 


BULLION    AND    PARITY    UNION.  187 

Bullion  and  the  General  Eemonetization  of  Silver. 

The  question  now  arises  whether  the  movement  for  joint 
action  of  nations  to  restore  silver  to  its  former  equality 
with  gold  offers  any  conflict  of  principle  with  the  tendency 
which  I  have  above  ascertained. 

As  I  have  borne  some  share  in  that  movement  in  vari- 
ous countries  since  its  inception,  I  may  not  inappropriately 
give  my  testimony  on  that  issue. 

I  see  no  conflict  between  the  two,  no  objection  to  a  for- 
ward step  in  the  direction  above  indicated.  It  is  true  that 
the  idea  of  minting,  of  coin,  as  distinguished  from  bullion, 
has  all  along  been  kept  in  the  foreground  in  the  advocacy 
of  such  restoration  of  silver  to  its  former  place.  It  was- 
natural  and  proper  that  this  should  be  so.  The  central 
feature  of  monetary  systems  has  been,  is,  and  is  likely  to- 
remain — a  unit  of  valuation  embodied  in  coin.  This  being 
the  case,  free  mintage  is  the  natural  and  proper  objective 
point  for  the  advocates  of  the  reform  proposed. 

But  the  fundamental  object  is  equality  of  legal  status 
for  the  two  metals.  As  the  greater  includes  the  less  it  is 
plain  that  this  implies  no  opposition  to  an  enlarged  em- 
ployment of  metal  in  the  form  of  bullion  as  compared 
with  coin.  Indeed  I  have,  for  many  years,  been  of  the 
opinion  that  the  adoption  of  the  proposed  measures  for 
legal  equalization  of  the  metals  would  tend  to  reduce  for 
both  of  them  the  now  exaggerated  need  of  spending  and 
of  losing  so  much  in  the  minting  and  use  of  coin. 

These  views  may  now  conveniently  be  tested  by  refer- 
ence to  the  formal  proposals  made  in  the  Conference  of 


188  BULLION    OR    COIN? 

1878,  and  by  a  farther  examination  of  the  bearing  of  Mr. 
Windom's  plan  upon  the  policy  of  the  Conferences. 

The  policy  established  by  the  Allison  Amendments  to 
the  Bland  Bill. 

Under  the  authority  of  the  act  of  February  28,  1878, 
calling  the  Conference  of  1878,  the  following  propositions 
were  presented  by  the  American  Commissioners,  in 
August,  1878,  to  the  representatives  of  the  various 
Powers  in  Paris,  the  form  being  that  of  a  draft  resolution  • 

I.  It  is  the  opinion  of  this  Assembly  that  it  is  not  to  be 
desired  that  Silver  should  be  excluded  from  Free  Coinage 
in  Europe  and  the  United  States  of  America.     On  the  con- 
trary, the  Assembly  believes  that  it  is  desirable  that  the 
Unrestricted  Coinage  of   Silver,  and  its  use  as  Money  of 
Unlimited  Legal  Tender,  should  be  retained  where  they 
exist,  and,  as  far  as  practicable,  restored  where  they  have 
ceased  to  exist  : 

II.  The  use  of  both  Gold  and  Silver  as  Unlimited  Legal- 
Tender  Money  may  be  safely  adopted. 

First. — By  equalizing  them  at  a  relation  to  be  fixed  by 
international  agreement ;  and 

Secondly. — Bj  granting  to  each  metal,  at  the  relation 
fixed,  equal  terms  of  Coinage,  making  no  discrimination 
between  them. 

The  following  third  proposition  was  prepared  and  held 
in  reserve,  awaiting  the  development  of  the  views  of  the 
Conference  : 

III.  The  Delegates  here  present  agree   to   recommend 


THE  POLICY  OF  THE  CONFERENCES.       189 

to  their  respective  governments  that,  by  the  free  coinage 
of  silver  at  a  relation  to  be  agreed  upon,  or  provisionally, 
through  extended  coinage  upon  government  account  and  the 
accumulation-  of  silver  bullion  in  Public  Treasuries,  they 
make  a  concerted  effort  to  restore  silver  to  its  function 
as  money  of  full  power. 

In  the  absence  of  co-operation  in  Europe,  the  course 
of  the  United  States  was  thus  definitely  marked.  We 
maintained  the  attitude  of  favoring  Concurrent  Free  Mint- 
age, ready  to  establish  it  as  soon  as  Europe  should  be 
ready ;  and  in  the  years  which  have  passed,  Congress  has 
carried  out  alone  the  proposition,  which  the  Commission 
of  1878  formulated  and  placed  in  the  second  rank. 

An  extended  coinage  on  Government  account  has  been 
kept  up,  and  a  notable  accumulation  made  in  the  Public 
Treasury  of  silver  ballion,  but  subdivided,  in  the  form  of 
coin.  The  proposition  now  made  is  to  leave  bullion  un- 
minted. 

The  novelty  of  Mr.  Windom's  plan. 

The  proposal  of  the  Secretary  of  the  Treasury  is  that 
holders  of  native*  silver  bullion  shall  have  the  right  to 
sell  it  to  the  Government  at  the  market  price  for  new 
"Treasury  notes"  (expressed  in  dollars)  which  are  legal 

*  The  product  of  the  mines  of  the  United  States  or  of  ores  here  smelted 
and  refined. 


190  BULLION    OK    COIN? 

tender  to  the  Government  and  also  convertible  in  certain 
ways.* 

This  is  proposed  as  a  substitute  for  the  present  law 
under  which  the  Government  is  compelled  to  purchase 
-and  coin  two  million  (gold)  dollars'  worth  of  silver  bullion 
per  month,  and  has  the  liberty  to  purchase  up  to  four 
millions'  worth. 

The  plan  is  presented  in  view  of  a  very  general  sense  of 
dissatisfaction  with  the  present  law  of  compulsory  coin- 
age, which  is  shared  by  the  Secretary.  At  the  same  time 
the  plan  is  conceived  in  the  spirit  of  entire  accord  with 
the  policy  of  the  Conferences,  which  its  author  puts  in 
view  in  his  Keport  as  directed  toward  the  true  goal,  the 
iinal  and  satisfactory  solution  of  the  silver  difficulty. 

It  will  appear,  from  what  has  gone  before,  that  while  the 
proposed  law,  regarded  as  a  whole,  is  without  precedent, 
yet  the  novelty  of  it,  so  far  as  the  issue  between  bullion  and 
•coin  is  concerned,  lies  in  the  frankness  and  fullness  of  its 
adaptation  to  facts.  This  is  a  rare  merit. 

How  unwieldy  a  monetary  system  is,  how  difficult  it  is 

*The  further  details  are  as  follows:  The  notes  are  to  be  redeem- 
able on  demand  at  the  Government's  option,  either  in  gold  coin  or 
in  silver  bullion  of  equal  value  to  the  notes  on  the  day  of  demand,  or  in 
silver  dollars  at  the  holder's  option.  The  Government  in  effect  becomes 
the  owner  of  the  bullion  although  compelled  to  hold  the  deposit,  but  has 
the  right  to  dispose  of  bullion  at  the  market  price  to  the  limited  extent 
of  any  demand  for  redemption  made  by  holders  who  are  unwilling  to  take 
silver  dollars  in  return  for  notes,  and  it  has  the  right  to  coin  bullion  and 
issue  the  coin  to  make  good  any  gold  or  silver  coin  issued  for  redemption 
of  notes.  Mr.  Windom's  Bill  was  presented  to  Congress  January  20,  1890. 


OBSCURITY    OF    MONETARY    QUESTIONS.  191 

for  nations  to  mould  and  modify  their  monetary  policy  by 
reference  to  changing  facts  which  affect  its  soundness,  is 
shown  by  ample  experience  throughout  the  past. 

Perhaps  the  following  illustration  will  commend  itself 
to  the  reader,  quite  independently  of  any  bias  touching 
matters  of  controversy. 

The  surplus  in  the  Treasury,  long  the  source  of  political 
pre-occupations,  offered  in  the  late  electoral  contest  a  very 
apple  of  discord,  as  an  evil  which  the  opposing  champions 
of  High  and  Low  Tariff  charged  each  upon  the  other.  Yet 
so  far  as  I  am  informed,  in  the  whole  year  of  debate  which 
began  with  Mr.  Cleveland's  Message  of  December,  1887, 
and  ended  with  General  Harrison's  election  in  November, 
1888,  no  word  was  said  in  public  concerning  an  undisputa- 
ble  source  of  the  surplus  with  which  neither  customs  nor 
excise,  neither  protective  duties  nor  the  tax  on  spirits  and 
tobacco,  etc.,  had  aught  to  do. 

I  refer  to  the  item  of  Seigniorage,  as  the  language  of 
the  Treasury  calls  it  (on  full  Legal-Tender  money),  which 
has  reappeared  on  the  books  of  an  English-writing  Na- 
tional Treasury  for  the  first  time  since  early  in  the  reign  of 
Charles  II.  We  have  taken  to  the  modern  representative  of 
"His  Majesty's  rate,"  so.  naturally  that  orators  and  news- 
papers now  take  it  quite  for  granted !  If  bullion  or  cash 
had  been  held  in  the  Treasury  to  make  good  in  specie 
the  face  value  of  the  Silver  Coin  outstanding,  dollars  and 
change,  which  would  have  taken  a  hundred  millions,  there 
would  have  been  no  surplus  at  all  to  speak  of !  Even  now 
I  do  not  recall  seeing  anything  in  print  as  to  the  effect  of 


192  BULLION    OK    COIN? 

Mr.  Windom's  plan  in  checking  the  surplus.  If  his  pro- 
posal to  repeal  the  present  compulsory  coinage  law  be  not 
adopted,  the  sum  of  near  nine  millions  is  given  in  the 
Treasury  estimates  for  the  coming  years  as  the  expected 
revenue  from  Seigniorage  on  Silver  Dollars. 

Contemporary  movements  in  England  are  of  analogous 
effect.  The  Bank  of  England  still  neglects  its  legal  privi- 
lege of  issuing  notes  on  Silver  Bullion,  presumably  because 
silver  is  not  regarded  as  '  good  enough.'  Yet  the  Treasury 
has  been  buying  silver  at  22  and  coining  it  at  14.30  !  This 
50  per  cent,  in  Seigniorage  on  change,  issued  at  a  time 
when  gold  half-sovereigns  are  being  withdrawn,  is  a  wel- 
come pe7)dant  to  our  Dollars! 

In  both  countries  a  rise  in  silver  would  turn  into  real 
profit  this  nominal  profit  in  the  past,  but  check  it  in  the 
future. 

In  view  of  the  peculiar  courses  into  which  the  prac- 
tice of  nations  as  to  silver  has  fallen,  it  is  doubly  im- 
portant for  monetary  thinkers  to  recur  to  first  principles  ; 
to  ascertain,  as  it  were,  the  points  of  the  compass,  and  get 
a  rudimentary  notion  of  sailing  directions,  which  should 
be  available  for  the  fleet  of  ships  of  State. 

I  therefore,  with  whatever  emphasis  I  can  command, 
present  ther  following  averments  : 

Acts  of  silver  outlawry  adopted  between  the  First  In- 
ternational Monetary  Conference  (1867)  and  the  Second 
(1878),  the  chief  of  which  was  the  closing  of  the  Paris 
Mint,  created  for  the  money-using  world  a  transition  state 


THE  PROJECT  OF  FEDERATION.         193 

of  unstable  equilibrium,  the  only  escape  from  which  is  by 
that  return  to  concurrence  in  maintaining  equality  of  the  two 
money  metals  which  was  proposed  to  the  nations  in  1878. 
No  arrangement  for  silver  money  in  the  period  which 
elapses  before  the  solution  proposed  through  the  Con- 
ference of  1878  is  attained,  can  have  the  prospect  of  sta- 
bility and  the  certainty  of  effect  which  gold  money  enjoys. 
The  chief  test  of  new  measures  is  whether  or  no  they  ad- 
vance the  desired  return  to  concurrent  laws  equalizing 
the  metals  ;  and  the  general  criterion  is,  whether  or  no  they 
adapt  themselves  to  the  facts  as  they  are,  rather  than  to 
visionary  theories,  which  may  be  conceived  with  a  view 
to  what  the  facts  ought  to  have  been,  what  they  ought  to 
be  now,  or  what  they  should  be  in  the  future. 

Legal  equality  of  the  metals. 

I  now  pursue  further  the  inquiry  touching  the  plan  of 
concurrent  action  of  nations  for  the  restoration  of  silver. 
I  submit  that  in  such  a  plan,  the  question  how  much  each 
member  of  the  proposed  Union  may  prefer  to  economize 
in  its  minting,  and  in  its  use  of  coin,  may  advantageously 
be  left  to  the  intelligent  self-interest  of  the  nations  re- 
spectively. They  can  safely  do  what  they  please  with  the 
bullion  they  receive.  It  is  a  matter  in  which  other  nations 
are  not  concerned. 

In  so  far,  however,  as  equality  of  legal  status  between 
the  two  metals  is  involved,  all  nations  are  interested,  and 


194  BULLION    OE    COIN? 

hence  in  any  complete  scheme  of  joint  action,  the  con- 
ditions under  which  bullion  can  be  exchanged  for  cur- 
rent money  come  necessarily  into  view.  While  the  de- 
sired equality  can  be  substantially  secured  through  the 
right  of  free  mintage,  it  can  be  perfected  only  by  equal- 
izing, as  between  the  two  metals,  the  conditions  which 
may  exist  as  to  the  right  of  sale  of  bullion.  Whatever 
right  is  given  to  one  metal  should  also  be  given  to  the 
other.  The  question  whether  the  Government  shall  hold 
the  bullion  uncoined  is  another  matter.  So  are  the  ques- 
tions whether  it  shall  make  a  charge  for  minting  coin  or 
no,  and  whether  it  shall  make  a  deduction  for  time,  like 
the  three  half -pence  to  the  pound  which  the  Bank  of 
England  retains.  I  do  not  mean  that  these  are  not  im- 
portant subjects.  I  mean  that  they  are  of  subordinate 
rank,  as  compared  with  equality  of  treatment  for  the  two 
metals  within  the  borders  of  the  several  nations. 

As  will  appear  more  fully  in  the  sequel,  the  point  here 
raised  of  equal  rights  for  silver  and  gold  bullion  has  not 
entirely  lacked  attention.  The  object  aimed  at  would 
naturally  be  obligatory  purchase  (Free  Sale)  of  gold  and 
silver  bullion  in  each  country,  at  identical  relative  rates 
for  either  metal  in  the  various  respective  currencies.  I 
reprint  below  an  extract  from  earlier  publications  which 
contains  matter  bearing  upon  this  point. 

On  referring  to  this  extract  it  will  perhaps  be  found  to 
sustain  the  view  which  has  been  foreshadowed  in  the  ob- 
servations already  made  in  this  paper,  that  the  new 
departure  proposed  by  Mr.  Windom,  while  conceived  in 


THE    PARITY    OF    BULLION  195 

its  details  with  a  view  to  the  determining  conditions  of  the 
present  state  of  affairs  in  one  country,  is  capable  of  ex- 
tension and  of  application  in  all  countries  as  an  element 
of  a  general  amendment  of  monetary  systems. 


TUB  PARITY  OF  BULLION,  AND  MODES  or  MANTAINING  IT. 

(First  printed  with  '  The  Parity  of  Moneys,  as  regarded  by  Adam  Smith, 
Ricardo,  and  Mill,'  which  forms  chapter  IV  of  this  volume.) 

In  advocating  the  Eeinstatement  of  Silver  as  Money  the 
chief  practical  measure  recommended  has  been  Free  Coin- 
age, that  is  to  say,  the  duty  of  the  Mint  to  coin  for  all 
comers,  either  gratis  or  with  a  charge,  according  to  the 
laws  of  the  country.  This  would  leave  the  door  open 
to  those  little  inequalities  of  value  from  which  a  Gold 
Coinage  System  has  not  always  protected  gold  bullion,* 
even  when  its  position  was  the  most  favorable — while  it 
lay  between  the  Tower  and  the  Bank  of  England. 

A  suggestion  touching  this  important  point  of  detail  in 
the  plan  for  joint  action  of  nations,  was  made  in  the  Con- 
ference of  1881  by  Mr.  N.  G.  Pierson,  a  delegate  of  Hol- 
land (now  Governor  of  the  Bank  of  Holland),  namely,  that 
Banks  of  Issue  could  be  charged  with  a  duty,  which  would 
remedy  this  difficulty,  namely,  the  duty  of  buying  bullion 
from  all  comers  at  a  fixed  price  for  each  metal.  There  are 
also  other  grounds  in  favor  of  such  a  measure,  which  I 
will  not  enter  upon  here. 

*  Evidence  on  this  subject  is  given  in  '  The  Silver  Pound,'  page  60. 


196  BULLION    OR    COIN? 

Some  years  later,  being  invited  to  deliver  an  address 
before  the  American  Bankers'  Association  (at  its  meeting 
in  Boston,  August,  1886),  I  chose  the  Parity  of  Bullion  as 
my  subject,  and  made  my  address  an  argument  for  the 
adoption  of  a  resolution  which  I  caused  to  be  presented, 
and  which  was  adopted. 

The  resolution  is  as  follows  : 


WHEREAS,  The  question  of  proper  measures  to  be  taken 
in  concert  by  the  commercial  nations,  in  order  to  regulate 
metallic  money  has,  since  the  International  Monetary  Con- 
ferences of  1878  and  1881,  received  earnest  and  increas- 
ing consideration,  while  the  growing  divergence  between 
the  precious  metals  has  caused  cumulative  disturbance  of 
values,  and  has  injuriously  affected  business  relations  in 
all  parts  of  the  world,  and  threatens  further  evil  for  the 
future,  and, 

WHEREAS,  The  policy  proposed  to  the  nations  by  the 
United  States  in  1878,  and  by  France  and  the  United 
States  in  1881,  of  restoring  silver  to  free  coinage  by  a 
union  composing  the  chief  monetary  Powers,  deserves  uni- 
versal support ;  and, 

WHEREAS,  It  is  important,  in  order  to  prevent  inequality 
between  different  nations,  in  the  operation  of  the  monetary 
system  so  proposed,  that  silver  bullion  and  gold  bullion 
should  enjoy  equality,  as  well  as  silver  coin  and  gold  coin  ; 
and, 

WHEREAS,  Experience  has  shown  that  the  provision  of 
the  law  of  Great  Britain,  whereby  it  is  the  duty  of  the 
Bank  of  England  to  buy  all  gold  offered  to  it  at  a  fixed 


PARITY    OF    BULLION.  197 

price  per  ounce,  tends  to  establish  a  fixed  price  for  gold 
bullion  universally,  and  that  analogous  provisions  of  law 
in  the  several  nations  of  the  European  continent  tend  fur- 
ther to  relieve  gold  bullion  from  local  fluctuations  of  price  ; 
and  it  is  evident  that  similar  provisions  applied  to  silver 
bullion,  in  support  of  its  use  as  money,  would  give  it  sim- 
ilar protection  from  fluctuation  ;  and, 

WHEREAS,  Such  provisions  must  become  an  important 
part  of  any  plan  of  international  action,  and  hence  deserve 
thorough  and  thoughtful  consideration  ;  therefore,  be  it 

RESOLVED,  That  a  committee  be  appointed  by  the  Pres- 
ident to  take  into  consideration  this  whole  question  in 
every  particular  and  report  to  the  Executive  Council  of 
this  Association  at  such  early  date  as  shall  be  found  con- 
venient. 

The  Resolution  was  supported  by  Mr.  George  S.  Coe, 
of  New  York,  a  founder  and  former  President  of  the  As- 
sociation, and  was  moved  by  Mr.  Deshler,  of  Ohio,  and 
seconded  by  Mr.  Moss,  of  Ohio.  The  Committee  was 
afterwards  appointed.  I  am  not  informed  concerning  any 
report. 

The  Bank  Charter  Bill,  which  was  laid  before  the  Sec- 
ond Chamber  of  the  States-General  of  Holland  in  April, 
1887,  contains  (according  to  my  translation)  the  follow- 
ing proposed  amendment  of  the  existing  Act,  calculated 
to  give  effect  to  the  plan  mentioned  : 

"  The  State,  in  the  event  of  its  entering  a  Monetary 
Union  founded  on  the  system  of  the  double  standard,  and 


198  BULLION    OR    COIN? 

in  case  the  obligation  shall  have  been  laid  upon  the  chief 
Banks  of  Issue  in  the  countries  that  form  this  Union,  to 
buy  at  the  mint-price  all  the  money-metal  offered  them  for 
sale,  of  which  the  coinage  has  been  made  free  to  all  by 
law,  retains  the  privilege  of  imposing  the  same  duty  upon 
the  Bank  of  the  Netherlands." 


VII. 
EICARDO 

ON 

BULLION  NOTES  AND  SILVER. 


199 


RICARDO  ON  BULLION  NOTES  AND  SILVER. 

In  the  wide  circle  who  respect  the  authority  of  leaders 
of  thought  in  the  past  a  peculiar  interest  will  be  attached 
to  the  views  of  David  Ricardo  upon  monetary  subjects, 
for  his  prestige  in  the  broader  tield  of  economic  thought 
attaches  peculiarly  to  his  labors  on  currency.  His  mem- 
ory is  still — and  well  it  is  that  it  should  be  so — "  the 
shadow  of  a  great  name."  Dying  in  his  prime,  at  the  close 
of  a  long  struggle  of  financial  politics  in  which  he  had 
been  militant,  and  leaving  works  which  are  a  landmark  in 
science,  his  public  career  fortified  his  reputation  and  in- 
fluence in  later  days  as  a  thinker,  by  the  authority  which 
belongs  to  conspicuous  service  in  action. 

In  examining  some  years  ago  into  the  factors  of  the 
then  general  conviction  among  learned  men  in  England, 
that  the  exclusion  of  silver  from  English  money  (except 
as  change)  was  a  sound  and  wise  measure,  I  was  led  to  ex- 
amine closely  into  the  opinions  of  this  notable  man  about 
silver  and  gold.  The  result  was  very  different  from  what 
would  have  been  expected,  judging  from  the  attitude  on 
that  subject  lately  assumed  by  his  disciples,  for  the  im- 
pression seemed  universal  among  them  that  the  law  and 
the  prophets  against  silver  are  fortified  by  Ricardo's  name. 

I  shall,  therefore,  in  indicating  his  opinions  upon  bullion 
and  coin,  set  forth  what  he  thought  on  the  broader  issue 
of  the  "battle  of  the  standards." 

201 


202  BULLION    NOTES    AND    SILVER. 

Bicarclo's  literary  activity  began  in  1808,  when  he  put 
himself  in  the  van  of  the  movement  to  reform  the  paper 
money  regime,*  two  years  in  advance  of  the  famous  Bullion 
Committee.  It  was  not  long  after  that  he  brought  for- 
ward a  scheme  of  paper  notes  based  on  bullion.  In  1816 
he  printed  full  "  proposals  for  an  economical  and  secure 
currency  and  on  the  profits  of  the  Bank  of  England.'* 
The  greater  part  of  this  pamphlet  deals  with  the  internal 
regulation  of  the  Bank  and  with  its  relation  to  the  Gov- 
ernment and  the  public.  I  reprint  in  the  Appendix  the 
scheme  which  he  describes  as  "  an  expedient  to  bring  the 
English  currency  as  near  as  possible  to  perfection."  The 
centra]  point  of  interest  here  is  that  this  perfection  con- 
sisted, in  his  mind,  in  making  the  notes  redeemable  in 
uncoined  gold  (or  silver),  at  the  mint  standard  or  price, 
instead  of  by  delivery  of  coin. 

With  reference  to  Eicardo's  attitude  in  relation  to  the 
respective  claims  of  silver  and  of  gold  to  be  the  "  standard  " 
or  chief  money  of  England,  there  is  this  to  be  said.  It 
plainly  did  not  lie  in  his  plan  to  complicate  the  main 
issue  and  weaken  his  own  position  as  an  apostle  of  con- 
vertibility and  "  Hard  Money,"  as  we  should  say,  by  at- 
taching himself  as  a  partisan  to  the  claims  of  either  silver 
or  gold,  or  of  the  two  together,  as  the  unit  of  coinage. 

I  call  attention  to  the  phrase  unit  of  coinage,  because 
I  find  that  Ricardo  used  the  word  "  standard  "  in  a  sense 
quite  different  from  that  which  we  attach  to  it  commonly 


*  The  suspension  of  cash  payments  had  begun  in  1797.     Resumption 
was  ordered  by  the  act  of  1819,  and  was  completed  in  1823. 


IDEAS    OF    A    STANDARD.  203 

to-day.  It  is  a  very  malarious  word  and  needs  constant 
disinfecting  by  definition  to  be  used  with  safety.  I  find 
Ricardo  was  in  favor  of  the  "  silver  standard,"  and  yet  I 
do  not  believe  that  he  meant  by  that  the  demonetization, 
of  gold. 

Without  taking  ground  rigidly  in  favor  of  either  of  the 
three  proposed  or  possible  local  "standards"  or  units  of 
value  (the  single  gold  unit,  the  single  silver  unit,  and  the 
dual  silver  and  gold  unit),  Ricardo  declares  his  preference 
for  silver,  and  gives  his  reasons.  At  the  same  time  an  impar- 
tial recognition  of  the  availability  of  the  two  metals  which 
is  natural  to  a  time  when,  as  I  have  shown,  the  idea  of 
abolishing  one  of  them  had  not  been  conceived,  is  pre- 
sented in  his  writings  in  a  manner  which  is  not  a  little 
confusing  to  the  modern  reader.  He  often,  apparently 
for  the  sake  of  convenience,  speaks  of  "  gold,"  when 
another  writer — whom  experience  had  warned  that  pre- 
cision was  vital —  and  would  have  said  "  metallic  money,'* 
or  "the  money-metals." 

This  practice,  while  harmless  at  the  outset,  has  natu- 
rally, under  the  changed  conditions  which  have  obtained 
for  a  later  generation,  become  so  misleading  in  its  effect 
as  to  require  these  special  words  of  caution  to  one  who 
shall  cite  Ricardo  on  monetary  subjects.  An  example 
of  this  nature  may  be  'found  in  the  naive  account 
given  of  Ricardo's  position  by  the  late  Mr.  J.  R.  McCul- 
loch,  who  became  for  a  later  generation  a  representative 
of  "  gold  orthodoxy,"  and  who,  in  his  reference  to  Ricardo 
in  the  account  of  his  life  and  writings,  prefixed  to  the 


204  BULLION    NOTES    AND    SILVER. 

collected  Works,  of  which  he  was  the  editor,  entirely  ig- 
nores the  existence  of  silver.  This  falsification  of  most 
important  testimony  is  the  more  dangerous  because  of  its 
innocence. 

Kicardo's  plans  *  were  not  adopted  in  full.  The  Act  of 
1816  made  gold  the  "  Standard  Measure  of  Value,"  im- 
posed a  heavy  Seigniorage  on  Silver  Coin,  and  left  the  ex- 
ercise of  the  right  of  Free  Coinage  (which  it  re-enacted) 
subject  to  the  issuance  of  a  Proclamation  of  the  Crown. 

I 'eel's  Bill,  as  it  was  called,  the  Resumption  Act  of  1819, 
which  closed  the  paper  money  period  that  began  in  1797, 
applied  the  idea  of  redemption  in  bullion  to  the  following 
extent :  It  provided  that  the  Bank  must  deliver  on  de- 
mand in  exchange  for  bank  notes,  gold  bullion  of  standard 
fineness  not  less  than  sixty  ounces  at  one  time,  first,  at  <£4 
Is.  per  ounce  for  a  certain  period ;  then  at  any  rate  be- 
tween that  figure  and  £3  19$.  6d.  per  ounce  ;  then  at  the 
latter  figure  ;  then  at  any  rate  between  =£3  19$.  6d.  and  £3 
17$.  10J</.;  then  from  May  1, 1821,  to  May  1,  1823,  at  the 


*  The  following  comment  may  prove  of  interest : 

"I  cannot  resist  inquiring  what  would  have  happened  if  Ricardo  had 
been  led  in  some  way  to  put  his  Scheme  of  a  Monetary  System  for  England 
into  his  'Principles.'  Would  not  the  necessity  of  cohesion  have  forced 
itself  upon  his  mind  ?  Could  later  economics  have  taken  the  tone  we  have 
witnessed,  if  he  had  treated  ex  cathedra  of  the  Principles  of  Monetary 
Legislation  with  a  high -pressure  interference  scheme  to  back  them  ?  The 
•central  idea  of  what  I  shall  name  Ricardo's  Bullion  Standard  and  Bullion 
Certificate  Scheme  was  parity  maintained  by  all  the  force  of  law  that  was 
to  be  had.  And  I  must  also  allow  myself  the  daring  statement  that  the 
same  thing  may  be  said  of  all  orthodox  plans  for  a  convertible  paper  cur- 
rency— if  the  philosophers  only  knew  it !" — See  above,  page  132. 


PLAN    OF    RESUMPTION.  205 

latter  figure,  which  was  the  mint  price  of  gold ;  and  from 
May  1,  1823,  in  gold  coin  if  required.  The  Bank  had  the 
option  of  paying  in  coin  after  May  1,  1822. 

In  fact,  however,  the  Bank  anticipated  this  date,  and 
began  paying  in  coin  May  1,  1821,  so  that  the  experiment 
of  bullion  redemption  was  not  fully  tried. 

Kicardo's  comment  on  this  action  of  the  Bank  is  inter- 
esting. It  was  made  in  Parliament  during  the  debate  of 
1822.  He  maintained  that  the  inconveniences  of  the  re- 
turn to  a  metallic  standard  had  been  infinitely  increased 
by  large  premature  purchases  of  gold.  They  ought  not 
to  have  paid  in  specie  until  1823.  Mr.  Peel's  bill  was  in- 
tended to  try  w li  ether  a  bank  could  not  be  advantageously 
carried  on  upon  the  principle  of  pay  ing  the  notes  in  bullion. 
If  the  bank  had  gone  on  wisely  in  their  preliminary  ar- 
rangement, the  bullion  part  of  the  plan  would  have  worked 
for  a  number  of  years  beyond  the  time  stipulated. 

Without  going  into  the  pros  and  cons  of  Ricardo's 
measure,  I  may  allude  to  two  elements  of  conviction  then 
in  force,  which  probably  had  exerted  a  decisive  influence 
in  defeating  the  bullion  redemption  feature. 

Though  curiously  diverse  and  disparate,  the  two  lines 
of  opinion  lead  to  the  same  conclusion. 

First  was  the  confidence  inspired  by  the  book  of 
Lord  Liverpool,  whose  death  occurred  just  as  Ricardo 
came  upon  the  monetary  stage,  and  whose  prestige  as  a 
lifelong  counsellor  of  George  the  Third  was  fortified 
by  his  measures  to  maintain  a  coinage  system  of  "legal 
tender,  by  weight  as  well  as  by  tale,"  which  were  first 


206  BULLION    NOTES    AND    SILVER. 

adopted  in  1774,  and  the  principles  of  which  were  sup- 
posed to  be  impregnably  established  by  his  "  Treatise  on 
the  Coins  of  the  Realm  in  a  Letter  to  the  King  "  in  1805. 

The  second  element  to  which  I  refer  was  the  abhor- 
rence felt  toward  one-pound  notes,  as  a  temptation  to 
forgery.  Ricardo's  plan  involved  their  maintenance. 
To  those  who  prayed  "  Lead  us  not  into  tempation," 
it  seemed  a  wrong  thus  to  facilitate  forgery,  "  a  dread- 
ful wound  to  the  morality  of  the  people,"  to  quote  a 
phrase  from  the  Edinburgh  Review.  The  notes  seemed 
stained  with  blood,  not  quite  innocent,  but  blood  that 
need  not  have  been  shed.  These  notes  of  small  denomi- 
nations came  in  with  the  suspension  of  cash  payments — 
the  statute  prohibited  them  before  that — and  it  is  said 
that  between  1797  and  1818  three  hundred  and  thirteen 
forgers  died  on  the  scaffold. 

In  connection  with  the  fact  of  Ricardo's  preference  in 
favor  of  the  silver  standard  for  England,  it  is  well  to  re- 
member that  there  was  nothing  phenomenal  in  this  piece 
of  good  sense,  for  the  anti-silver  sentiment  which  is  known 
to  this  generation  is  very  modern.  I  have  elsewhere  set 
forth  ample  evidence  on  this  subject.  It  was  the  metrical 
reform  movement,  at  its  height  after  1850,  in  which  the 
prepossessions  of  the  physical  scientist  and  of  the  account- 
ant put  to  sleep  the  judgment  of  the  economist  and  the 
prudence  of  the  statesman,  that  inspired  the  attack  against 
silver.  The  history  of  bullion  in  English  law  affords  a 
curious  bit  of  corroboration  to  this  statement. 

When  the  Bank  Charter  Act  came  before  Parliament  for 


MODERNNESS    OF    ANTI-SILVER    DOCTRINE.          207 

renewal  in  1833,  the  monetary  reformers,  with  Mr.  Lloyd, 
better  known  as  Lord  Overstone,  at  their  head,  succeeded 
in  making  it  obligatory  upon  the  Bank  to  publish  regu- 
larly a  statement  of  its  condition.  Now,  in  that  statement 
gold  and  silver  bullion  were  fused  together.  They  appeared 
in  print  as  "  bullion  " — a  collocation  plainly  abhorrent  to 
later  generations  when  gold  orthodoxy  had  come  into  the 
ascendant.  Coming  from  Lord  Overstone,  the  admission 
is  singularly  strong  evidence  of  the  general  opinion — that 
one  money-metal  was  "  as  good  as  the  other." 

The  Bank  Charter  Act  of  1844,  by  restricting  the  pro- 
portion of  silver  to  be  held  as  a  deposit  to  one-fifth  of  the 
total  amount,  made  it  necessary  to  report  silver  bullion  by 
itself,  and  a  provision  was  enacted  to  that  effect. 

An  interesting  instance  also  occurs  to  me  of  the  reap- 
pearance of  the  idea  of  Bullion  Certificates  in  a  form 
which  satisfied  in  full  the  theory  of  Sir  Kobert  Peel  as  to 
the  true  standard  of  Great  Britain  being  a  definite  quan- 
tity of  bullion. 

In  1847,  Mr.  Haggard,  a  respected  official  of  the  Bank 
of  England,  published  a  pamphlet,  entitled  "  Observations 
on  the  Standard  of  Value  and  the  Circulating  Medium  of 
this  country,"  in  which  he  set  forth  a  plan  for  the  refor- 
mation of  the  English  Monetary  System,  which  I  present 
here  in  brief,  stating  it  entirely  in  my  own  words  : 

The  Standard  of  Yalue  to  be  Silver  Bullion ;  four 
ounces  (thirty-seven-fortieths  fine)  being  the  sub- 
stratum of  a  Paper  Pound  Sterling. 


0?   THS 

[TJII71R 


208  BULLION    NOTES    AND    SILVER. 

The  Full  Legal  Tender  circulation  to  consist  of  paper 
representing  that  Bullion ;  the  Paper  (Bank  notes, 
so  called)  being  Legal  Tender  from  the  Bank,  as 
well  as  between  individuals. 

The  coin  to  consist  of  Gold  and  Silver  at  15^  to  1  ; 
Gold  Legal-Tender  for  £200  ;  Silver  Legal-Tender 
for  £2  ;  both  kinds  charged  with  '  seigniorage.' 


VIII. 

A  PAN-AMERICAN  DOLLAR  AND  THE 
POLICY  OF  UNION. 


A  PAN-AMEEICAN  DOLLAR  AND  THE  POLICY 
OF    UNION. 

Until  the  status  of  Silver  as  a  money-metal  is  restored 
it  is  futile  to  fix  a  weight  for  an  international  dollar. 

No  doubt  it  would  be  a  convenience  to  have  coins  of 
different  nations  of  the  same  weight  or  of  weights  bearing 
very  simple  numerical  relations  to  each  other  ;  but  to  give 
such  coins  legal-tender  power  outside  the  country  that 
mints  them  is  another  matter  altogether. 

The  United  States  invited  England,  France,  and  Ger- 
many to  join  in  settling  the  status  of  Silver,  but  never  pro- 
posed to  accept  their  coins  as  legal  tender  in  the  United 
States. 

In  the  greatest  work*  ever  composed  by  a  minister  of 
Foreign  Affairs  while  minister,  John  Quincy  Adams  ob- 
served that  "  to  despair  of  human  improvement  is  not  more 
congenial  to  the  judgment  of  sound  philosophy  than  to 
the  temper  of  brotherly  kindness  ;"  and  it  was  to  improve- 
ment by  assimilating  the  weights  and  measures  of  different 
countries  that  his  thought  and  work  were  directed. 

The  analogies  of  such  a  reform  with  the  assimilation  of 
the  weight  of  national  coins  suggest  the  application  of  this 

*  His  Keport  upon  Weights  and  Measures  prepared  in  obedience  to  a  res- 
olution of  the  Senate  of  March  3,  1817.     Philadelphia,  1821. 

211 


212  A   PAN— AMERICAN    DOLLAR. 

remark  to  the  present  theme.  Unfortunately  the  three 
score  years  and  ten  which  have  passed  since  philosophy 
and  brotherly  kindness  were  thus  seen  to  bid  men  hope, 
afford  material  I  will  not  say  to  encourage  despair  nor  to 
discourage  effort,  but  at  least  to  fortify  patience. 

"  Uniformity  of  weights  and  measures,"  said  Mr.  Adams, 
"  is  and  has  been  for  ages  the  common  anxious  and  earnest 
pursuit  of  France,  of  Great  Britain,  and,  since  their  inde- 
pendent existence,  of  the  United  States."  And  yet,  to-day, 
in  1890,  the  Anglo-cosmopolitan  world  still  counts  in  feet, 
pounds,  and  gallons  ;  albeit,  at  the  same  time,  side  by  side 
with  them,  the  unified  French  system  has  been  slowly  en- 
larging its  sphere.  But  in  the  domain  of  coinage  no  such 
orderly  progression,  still  less  a  steady  march  toward  uni- 
formity appears.  To  say  volcanic  upheaval,  is  to  give  a 
better  description  of  the  fact.  It  is  true  that  there  have 
been  achievements  in  the  line  of  uniformity.  Notable 
among  these  is  the  unification  of  German  coinage  systems, 
which  came  with  an  analogous  rectification  of  the  political 
map  of  Europe  ;  but  its  effect  was  to  perpetuate  diversity 
while  reducing  the  extent  of  existing  diversity.  The  new 
"  gold  mark  "  of  1871-'3  bears  no  simple  relation  to  dol- 
lar, franc,  sovereign,  guilder,  ruble,  or  rupee.  It  is  also 
true  that  within  this  period  a  cosmopolitan  silver  dollar 
has,  step  by  step,  won  its  way  to  adoption  by  a  goodly 
part  of  Christendom.  If  my  count  is  correct  a  hundred 
and  twenty  millions  of  population  now  accept  a  silver  piece 
which  began  its  career  as  the  Hercules  crown,  the  five- 
franc  piece  of  the  French  Ee volution.  From  Finland  to 


THE  COUNTRIES  OF  THE  FRANC.        213 

Cadiz,  by  way  of  the  Danube  and  Greece,  from  Paris  to 
Patagonia,  by  way  of  Hayti  and  Cuba,  that  weight  of  silver 
is  money  for  the  nation  or  league  that  coins  it.  But  not 
at  the  same  rate !  There  is  a  nominal  value  and  a  bullion 
value,  and  for  seventeen  years  the  two  values  have  been 
divorced.  Coins  struck  at  different  mints,  of  the  same 
weight  of  silver,  some  are  worth  many  per  cent,  more  than 
others,  according  to  the  gold  price  of  Silver.  Uniformity 
or  even  identity  is  thus  defeated  in  favor  of  something 
which  is  at  the  same  time  nominal  and  intrinsic,  and  to 
which  the  lore  of  the  scales,  the  thermometer,  and  the 
microscope  gives  no  clue.  It  is  in  the  presence  of  such 
facts  and  of  the  broad  considerations  arising  from  them 
that  the  proposal  of  a  Pan-American  silver  dollar  must  be 
assigned  to  its  place. 

To  complete  our  survey  of  them  I  shall  ask  the  reader 
the  frank  question  whether  he  ever,  before  reading  this 
paper,  had  heard  of  the  five-franc  piece  as  a  coin  of  serni- 
universal  currency — whether  he  ever  was  informed  of 
this  assimilation  of  coinage  systems,  extending  from  Fin- 
land to  Patagonia  ? 

Now  I  venture  to  believe  he  never  heard  of  it  before. 
No  doubt  he  has  heard  of  the  five-franc  piece,  perhaps 
handled  it — indeed,  it  was  once  a  dollar  of  the  United 
States,  full  legal  tender  at  93  J  and  at  93  cents — and  he 
has  probably  heard  of  the  Latin  Union,  perhaps  been  a 
tourist  within  its  borders,  in  France,  Italy,  Belgium, 
Switzerland.  But  my  question  relates  to  that  far  greater 
range  of  unification,  which  touches  at  one  extremity  the 


214  A   PAN-AMERICAN   DOLLAR. 

ancient  Grand  Duchy  of  Finland  and  covers  a  goodly  part 
of  the  ancient  American  Empire  of  the  Spanish  dollar  on 
the  other.  It  is  of  this  I  venture  to  believe  the  reader 
has  never  heard  before. 

This  affirmation  I  make  in  order  to  elicit  an  important 
lesson  which  bears  directly  on  our  theme,  namely  :  the 
narrow  range  of  interest  actually  engaged  in  this  matter 
of  uniformity  of  the  weight  (and  alloy)  of  coins.  Without 
being  trivial  when  regarded  alone,  the  subject  is  relatively 
trivial  when  brought,  as  it  generally  is,  into  competition 
with  the  really  vital  issues  involved  in  coinage  policy.  Side 
by  side  with  these  its  insignificance  can  be  described  only 
by  a  figure  ;  as,  for  example,  the  insignificance  of  smart 
uniforms  or  well-burnished  musket-barrels  as  compared 
with  a  successful  campaign. 

Of  course  there  is  great  difficulty  in  recognizing  the  true 
perspective  in  monetary  matters,  by  reason  of  the  subtlety 
of  the  distinctions  of  which  careful  account  must  be 
made.  Thus,  as  we  have  observed,  there  is  uniformity 
apparent  and  uniformity  real,  which  may  change  places 
under  the  operation  of  various  causes ;  there  is  identity 
which  is  real  and  yet  nominal  at  the  same  time.  In  deal- 
ing with  coins  we  are  engaged  with  the  problems  of 
evanescent  value,  with  the  '  mysteries  of  money.'  The 
mind  must  accustom  itself  to  pass  with  ease  from  point  to 
point  of  such  a  sequence  of  ideas  as  identity,  uniformity, 
parity,  exchangeability,  convertibility,  redemption.  Start- 
ing with  a  bit  of  stamped  metal,  which  is  a  simple  thing 
to  describe,  or  weigh,  or  analyze,  one  must  review,  or  be 


MEXICAN   DOLLAR   AND   BRAZILIAN   MILREIS.       215 

prepared  to  review,  the  conflicting  financial  policies  of 
nations.  It  is  like  the  difference  between  standing  on  the 
shore  and  navigating  the  ocean. 

We  return  to  consider  a  universal  American  dollar  as  a 
practical  measure  to-day.  We  have  seen  that  the  advan- 
tage of  such  a  coin  is  not  likely  to  be  very  great  under 
any  circumstances.  We  now  advance  to  the  observation 
that  as  matters  now  stand  it  is  impracticable  to  attain 
this  advantage,  whatever  it  may  be. 

If  Mexico  should  diminish  the  weight  of  her  dollar  to  equal 
the  dollar  of  Hamilton,  of  the  Fathers  of  our  Republic, 
there  would  be  the  same  difficulty  as  to  its  value,  the  same 
contrast  which  has  so  often  been  observed  at  the  two  ends 
of  the  bridge  at  the  boundary  at  El  Paso,  the  bullion  value 
for  one  and  the  higher  face  value  for  the  other,  the  latter 
appearing  the  more  real  because  of  its  relation  to  the  ma- 
jority of  existing  exchanges  and  valuations  in  which  Ameri- 
cans are  interested.  If  Brazil  should  undertake  to  estab- 
lish her  paper-money  in  some  stable  relation  to  a  new 
silver  piece  equal  to  our  dollar,  in  the  place  of  gold  milreis, 
it  could  make  no  change  in  the  fact  that  the  Anglo-Ameri- 
can silver  dollar  is  at  par  with  gold,  and  the  Latin-Ameri- 
can dollars  are  not.  So  if  the  other  Latin  countries  should 
abandon  the  Hercules  crown,  with  its  associations  of  his- 
torical continuity  going  back  beyond  the  pound  of  Charle- 
magne, there  would  still  be  that  fatal  bar  of  premium  or 
discount  to  bring  uniformity  to  naught. 

Thus  far  we  have  spoken  merely  of  assimilation,  of  uni- 
formity in  the  weight  of  a  silver  dollar  to  be  issued  by  the 


216  A   PAN-AMERICAN   DOLLAR. 

several  American  States ;  but  there  is  another  and  radi- 
cally different  proposition  involved  in  the  plan  as  it  is 
usually  entertained.  Moreover  the  distinction  to  which  I 
here  give  emphasis  is  not  as  often  apprehended  as  it  should 
be,  even  in  quarters  where  thorough  acquaintance  with  the 
subject  is  looked  for. 

I  refer  to  the  plan  of  making  such  a  coin  legal  tender 
in  a  nation  other  than  that  under  whose  authority  it  was 
minted.  There  is  a  constantly  active  disposition  to  fuse 
this  idea  and  the  idea  of  uniformity  together,  suppressing 
the  vital  distinction  which  I  vindicate. 

In  considering  this  plan  of  reciprocal  legal  tender  we 
will  leave  at  one  side  the  facts  as  they  are,  to  which  we 
have  already  directed  our  attention.  We  will  imagine  for 
the  moment  that  silver  occupies  the  same  monetary  rank 
in  all  of  the  several  American  countries ;  and  upon  this 
supposition  we  will  proceed  to  the  inquiry  why  the  pro- 
posed coin  should  be  legal  tender  in  each,  why  it  should 
have  compulsory  currency  in  countries  other  than  that  in 
which  respectively  it  was  coined  ? 

If  the  coins  are  good,  if  they  are  of  full  weight  and 
purity,  they  will  pass  on  their  merits  when  exported  to 
other  countries  where  similar  dollars  are  coined.  They 
there  come  into  the  hands  of  the  class  of  men  who  are 
familiar  with  coins,  and  know  whether  they  are  good  or 
not.  Thus  they  would  serve  in  the  payment  of  commercial 
balances  between  countries  as  international  money,  as  gold 
does  now.  They  would  be  taken  011  their  merits  just  as 
gold  eagles  are  taken  in  Paris  and  London,  or  napoleons 


CURRENCY    OF    FOREIGN    COINS.  217 

in  London  and  New  York,  or  sovereigns  in  New  York  and 
Paris.  The  eagle,  the  napoleon,  the  sovereign,  are  not 
legal  tender  except  in  the  country  that  coins  them.  Why 
should  the  silver  dollar  receive  a  greater  privilege  ? 

The  coins  of  the  different  states  of  the  Latin  Union  are, 
it  is  true,  receivable  in  the  public  offices  of  each  state,  and 
under  the  system  of  internal  revenue  there  prevailing  the 
practice  of  these  offices  is  potent  in  establishing  the  cur- 
rency of  coins.  But  this  arrangement  grows  out  of  the 
semi-political  and  social  causes  which  have  led  to  a  thor- 
ough-going uniformity  of  coinage  (embracing  multiples  and 
fractions  of  the  franc),  established  with  centralized  and 
concurrent  control — a  system  made  practicable  by  the  close 
vicinity  of  these  nations  and  the  entire  ease  and  great  ex- 
tent of  communication  between  them.  And  even  under 
these  circumstances  the  law  does  not  enforce  that  com- 
pulsory legal  tender  between  individuals  which  we  are  now 
considering. 

Such  compulsory  currency,  conferred  merely  by  favor  of 
a  foreign  stamp  upon  a  coin,  seems  plainly  to  be  a  statu- 
tory arrangement,  by  help  of  which,  although  contrary  to 
the  intent  of  the  legislator,  fraud  may  be  assisted  to  find 
its  victim.  It  is  not  difficult  for  a  citizen  to  understand 
what  are  the  coins  of  his  own  country  and  the  merits  or 
demerits  of  the  several  pieces  which  may  come  to  him  in 
his  business  transactions.  But  imagine  people  in  the  va- 
rious country  neighborhoods  scattered  over  the  continental 
domains  of  the  United  States  called  upon  to  deal  with 
coins  of  any  and  all  American  Republics,  Haytian,  Domin- 


218  A    PAN-AMERICAN    DOLLAK. 

ican,  Mexican,  Nicarauguan,  Guatemalan,  Honduran,  Sal- 
vadorian,  Costa  Rican,  Venezuelan,  Colombian,  Bolivian, 
Ecuadorian,  Peruvian,  Chilian,  Brazilian,  and  Argentine ! 
An  opportunity  for  undiscoverable  frauds  of  which  the  de- 
fenceless poor  must  be  the  chief  victim !  Even  leaving 
the  question  of  counterfeiting  out  of  sight,  the  facility  of 
finding  a  market  for  light  coins  in  the  country  districts 
would  be  a  continual  temptation.  And  neither  local  nor 
international  control  would  avail  wholly  to  neutralize  this 
temptation. 

It  is  also  to  be  considered  that  so  far  as  governments 
should  under  such  a  system  become  responsible  for  making 
good  the  defects  of  the  circulation,  the  scheme  would  tend 
to  make  the  greatest  monetary  Power  a  guarantee  for  all. 
And  as  fate  seems  to  have  marked  out  the  United  States 
for  that  position,  the  burden,  whatever  it  is,  would  fall 
here. 

Now,  if  there  were  any  great  advantage  to  be  gained  by 
a  system  of  reciprocity  so  very  far-reaching  it  would  be 
necessary  to  enter  into  the  details  of  debit  and  credit,  pro 
and  con,  in  this  behalf. 

But  there  are  none !  There  is  no  close  political  and 
social  inter-relation,  nor  is  there  close  neighborhood  be- 
tween the  Anglo-American  Republic  and  the  Latin- Ameri- 
can Eepublics  such  as  could,  by  mere  iteration  of  the  effort, 
enlarge  into  the  range  of  practical  importance  the  trivial 
convenience  to  importers  and  tourists  of  not  having  to  ex- 
change one  kind  of  cash  for  another.  When  the  steamers 
at  New  York  for  South  America  are  as  many  and  as 


PROPOSALS    OF    THE    CONFERENCE    OF    1878.        219 

crowded  as  those  now  sailing  for  Europe,  and  when  the 
trains  carry  more  passengers  across  the  Mexican  than 
across  the  Canadian  border,  it  will  be  time  to  take  into 
favorable  consideration  a  reciprocity  of  legal  tender  or  a 
fusion  of  currencies,  which  we  have  not  thought  seriously 
of  offering  to  the  pound  sterling  or  to  the  Canadian  dollar. 

This  reference  to  our  policy  in  Europe  brings  in  view 
the  fact  that  such  reciprocity  or  fusion  formed  no  part  of 
the  plan  of  monetary  federation  proposed  to  the  European 
nations  in  the  Conference  in  Paris  in  1878.  That  pro- 
posal referred  not  to  the  weight  nor  to  the  extra-territorial 
currency  of  coin,  but  to  the  material  of  money.  It  dealt 
with  the  substance,  not  with  the  form.  The  question  of 
form  was  excluded. 

This  was  not  done  without  opposition. 

The  issue  was  raised  and  was  decided.  The  utterances 
of  the  American  delegates  at  both  Conferences  will  be 
found  in  harmony  with  the  aims  of  the  agitation  which 
preceded  the  decision  of  Congress  to  call  the  Conference, 
and  with  reference  to  which  the  words  of  the  statute  would 
naturally  be  construed.  In  the  Document  of  the  Confer- 
ence of  1878,  I  took  pains  to  bring  into  prominence  the 
distinction  between  our  proposal  and  earlier  plans  of 
monetary  union.  I  reprint  extracts  bearing  on  that 
subject  in  the  Appendix.  I  may  also  refer  to  late  remarks 
on  the  same  subject  on  page  39. 

It  will  be  seen  that  in  formulating  the  policy  of  the 
United  States  as  we  did,  we  not  only  disengaged  the 
important  from  an  entanglement  with  the  trivial,  but 


220  A    PAN-AMERICAN    DOLLAR. 

removed  from  a  plan  that  is  practical  and  practicable  an 
extraneous  element,  both  impracticable  and  impolitic. 

And  now  what  shall  we  say  of  the  Act  of  Congress  ap- 
proved March,  1888,  which  put  among  the  objects  to  be 
deliberated  upon  in  a  Conference  of  the  Delegates  of 
American  Nations  in  Washington, 

the  adoption  of  a  common  silver  coin  to  be  issued 
by  each  government,  the  same  to  ~be  legal  tender  in 
all  commercial  transactions  between  the  citizens  of 
all  the  American  states  f 

Here  we  have  bound  in  one  phrase,  for  all  American 
republics, 

assimilation  of  weight  and  value, 
reciprocity  of  legal  tender, 

the  first  of  which — at  least  at  present — is  quite  impossi- 
ble, and  the  second  objectionable  in  a  high  degree  under 
any  circumstances. 

One  may  well  wonder  how  such  a  bill  could  become 
law.  It  must  be  admitted  with  regret  that  this  legal-tender 
clause  gives  a  striking  instance  of  the  lack  of  adequate 
arrangements  for  the  revision  of  the  language  of  bills 
before  Congress ;  a  lack  which  has  been  often  remarked, 
and  will,  no  doubt,  in  due  time  be  supplied.  The  evil 
genius  that  inspires  legislative  '  slips  of  the  pen '  could 
hardly  have  chosen  a  more  shining  page  than  that  which 
bears  an  invitation  from  this  country  to  the  Latin-Ameri- 
can Kepublics  to  a  Conference  in  Washington,  intended 
to  promote  brotherhood  throughout  the  Americas. 


AMERICAN    MONETARY    UNION.  221 

The  sequel,  as  thus  far  developed,  is,  in  brief,  the  fol- 
lowing : 

The  International  American  Conference  which  was  con- 
vened in  October,  1889,  appointed  a  Committee  on  Mone- 
tary Federation,  from  which  final  reports  were  made  at 
the  close  of  March,  1890. 

Hon.  T.  Jefferson  Coolidge  (United  States)  presented  a 
minority  report,  the  recommendation  of  which  was  to  the 
effect  that  the  Delegates  to  the  Conference  advise  their 
respective  governments  that  it  was  inexpedient  to  adopt 
a  common  silver  coin,  to  be  either  a  partial  or  full  legal 
tender  in  the  several  countries,  until  the  efforts  of  the 
United  States  to  re-establish  the  former  status  of  silver  by 
concurrent  action  with  European  nations  shall  have  been 
successful. 

In  closing  his  address  Mr.  Coolidge  added :  "I  desire 
it  distinctly  understood  that  I  approve  entirely  of  all  the 
Eepublics  of  the  Americas  adopting  a  currency  of  uniform 
fineness  and  weight.  My  objection  is  to  the  legal-tender 
clause." 

In  the  final  Keport  of  the  Committee  the  following 
resolution  was  proposed  : 

The  International  American  Conference  is  of  opinion 
that  great  advantages  would  accrue  to  commerce  between 
the  nations  of  this  continent  by  the  use  of  a  coin  or  coins 
that  would  be  current,  at  the  same  value,  in  all  the  coun- 
tries represented  in  this  Conference,  and  therefore  recom- 
mends— 


222  A    PAN- AMERICAN   DOLLAR. 

1.  That  an  International  American  Monetary  Union  be 
established. 

2.  That  as  a  basis  for  this  Union  an  international  coin 
or  coins  be  issued,  which  shall  be  uniform  in  weight  and 
fineness  and  which  may  be  used  in  all  the  countries  repre- 
sented in  this  Conference. 

3.  That  to  give  full  effect  to  this  recommendation  there 
shall  meet  in  Washington  a  commission  composed  of  one 
delegate,  or  more,  from  each  nation  represented  in  this 
Conference,  which  shall  consider  the  quantity,  the  kind  of 
currency,  the  uses  it  shall  have,  and  the  value  and  propor- 
tion of  the  international  silver  coin  or  coins  and  their  rela- 
tions to  gold. 

4.  That  the  Government  of  the  United  States  shall  in- 
vite the  commission  to  meet  in  Washington  within  a  year, 
to  be  counted  from  the   date  of  the   adjournment  of  this 
Conference. 

The  report  is  signed  by  the  Hons  E.  A.  Mexia  (Mexico), 
Morris  M.  Estee  (United  States),  Jose  Alfonso  (Chile), 
Jeronimo  Zelaya  (Honduras),  Juan  Francisco  Velarde 
(Bolivia),  and  Carlos  Martinez  Silva  (Colombia). 

The  resolution  was  adopted. 


IX. 


ON  MEASURES  IN  AID  OF  DEMONETI- 
ZATION. 


223 


ON  MEASURES  IN  AID  OF  DEMONETIZATION. 

Repugnant  as  demonetization  is  to  the  friends  of  silver, 
it  is  not  unlikely  that  some  of  the  interesting  incidents  of 
that  erroneous  policy  may  have  escaped  attention  ;  and 
hence  it  may  be  profitable  to  analyze  the  situation  with  a 
view  to  possibilities  in  that  direction.  The  reader  will 
observe  that  I  am  not  attempting  to  prophesy.  I  am 
merely  suggesting  certain  elements  for  a  seaman-like  fore- 
cast bearing  upon  the  navigation  of  a  ship  of  state. 

The  friend  of  silver  desires  to  enlarge  the  range  of  its 
monetary  use ;  the  demonetizer  to  reduce  that  use  by 
closing  his  territory  against  it.  Now,  it  will  become  ap- 
parent upon  examination  that  so  far  as  the  general  position 
of  silver  is  concerned  it  makes  little  difference  in  what  par- 
ticular place  this  monetary  use  exists.  To  increase  the  use 
of  silver  in  one  place  and  thereby  diminish  it  in  another  is 
futile. 

The  practical  absurdity  of  this  course  is  duplicated  when 
the  measure  proves  a  political  blunder.  And  this  would 
be  the  case  if  Demonetization  in  the  United  States  facili- 
tates demonetization  abroad.  Not  only  will  it  do  no  good 
to  silver,  so  far  as  the  dollars  Demonetized  are  balanced  by 
dollars  demonetized,  but  wherever  it  happens  it  weakens 
the  silver  party  and  its  prospects  by  withdrawing  from 
their  side  the  political  interest  in  a  general  restoration  of 


225 


226  MEASURES    IN   AID    OF   DEMONETIZATION. 

silver  to  its  place  as  money,  that  grew  out  of  the  former 
ownership  of  this  silver,  which  we  suppose  to  be  demone- 
tized. 

For  example,  there  is  the  case  of  Austria-Hungary.  Ac- 
cording to  report,  efforts  are  on  foot  there  to  establish  the 
gold  standard.  Suppose  that  circumstances  are  provided 
by  pro-silver  action  here  which  enable  Austria-Hungary 
to  sell  out  her  silver  stock  for  gold.  That  stock  is  not  a 
very  great  sum,  yet  as  far  as  it  goes  it  would  neutralize 
that  amount  of  '  monetization  '  here.  But  beyond  all  that 
is  the  political  effect  of  shutting  the  doors  of  that  Empire 
to  silver  in  the  future.  And  that  effect  does  not  stop  at 
the  border.  It  must  bear  upon  the  future  policy  about 
money  of  the  growing  Danubian  States,  of  Russia,  of  Ger- 
many, and  so  of  Italy.  To  produce  such  a  result  tends  to 
darken  the  future  of  silver. 

Let  us  for  a  moment  consider  what  might  be  done  in 
other  countries  in  the  way  of  demonetizing  silver  and  what 
loss,  if  any,  would  accrue  to  them  from  such  act. 

Demonetization  or  a  reduction  of  monetary  employment 
may  be  said  to  occur  wherever  the  character  of  money  is,  in 
law  or  fact,  withdrawn  from  silver. 

These  conditions  I  find  to  be  fulfilled  by  the  following 
acts : 

(1.)  Any  step  toward  closing  the   mints  now  open  to 

silver. 
(2.)  Any  step  withdrawing  legal  tender  privileges  from 

silver. 


REDUCING    THE    EMPLOYMENT    OF    SILVER.  227 

(3.)  The  retirement  and  melting  down  of  silver  coin,  now 

circulating  at  a  nominal  rate.     (Europe.) 
(4.)  The  accumulation  of  gold   stocks   in   the   place   of 
silver  stocks,  where  silver   coin   circulates  at  its 
normal  value.     (Asia.  South  America,  and  Mex- 
ico.) 

Of  these  acts,  a  decrial  of  coin  (3)  and  a  change  of  legal 
tender  law  (2)  need  be  public.  The  practice  of  a  Treasury 
as  to  the  receipt  of  coin  may,  de  facto,  reduce  as  well  as 
enlarge  the  legal  tender  privilege  without  attracting  gen- 
eral attention. 

Below  the  range  of  such  public  acts,  the  monetary  em- 
ployment of  silver  may  be  diminished,  privately  as  well  as 
openly, 

by  Governments,  by  Banks,  etc.,  by  individuals. 

What  direct  and  immediate  losses  are  likely  to  accrue 
to  the  actors,  through  such  acts  of  demonetization  ? 

The  direct  and  immediate  loss  is,  in  any  case,  very 
slight,  provided  the  act  does  not  immediately  produce  an 
actual  fall  of  silver  relatively  to  gold.  I  emphasize  the 
words  "  direct  and  immediate,"  for  experience  amply 
teaches  that  such  losses  exert  a  deterrent  effect  out  of  all 
proportion  greater  than  their  importance  (as  compared 
with  the  losses  which  are  remote  or  indirect)  would  war- 
rant. And  the  visible  or  obvious  remote  and  indirect 
loss  will  be  very  slight,  provided  the  act  does  not  clearly 
promise  to  produce  an  actual  fall  of  silver  at  a  later 
period.  To  an  enlightened  eye  there  is  a  real  loss  in 


228  MEASURES    IN    AID    OF    DEMONETIZATION. 

the  tendency  of  such  acts  to  defeat,  or  at  least  postpone, 
the  future  settlement  of  the  relations  of  money-metals, 
which,  remaining  unsettled,  must  continue  to  maintain  un- 
rest in  various  degrees  throughout  the  various  regions  of 
the  economic  world.  But  this  objection  does  not  appeal 
to  the  partisan  of  gold,  and  hence  would  not  avail  to 
check  the  supposed  efforts  of  a  gold  party  to  get  rid  of 
silver. 

Moreover,  if  the  United  States  undertakes  to  '  take  care 
of  silver,'  it  is  easy  for  a  European  to  belittle  these  evils 
and  dangers.  So,  too,  of  the  danger  referred  to  in  the  pro- 
viso that  the  act  of  demonetization  shall  not  produce  an 
actual  fall  of  silver.  It  is  easy  for  a  European  who  wishes 
to  do  so  to  think  he  can  transform  his  little  stock  from  white 
to  yellow,  without  disturbing  the  market,  so  long  as  a  great 
Power  like  the  United  States  is  monopolizing  as  a  pur- 
chaser. 

With  reference  to  (3)  the  melting  down  of  coins  circu- 
lating above  their  normal  value  relatively  to  gold,  it  is 
important  to  mark  the  prevalence  of  an  exaggerated  esti- 
mate of  the  losses  which  would  arise  from  such  acts.  I 
say  exaggerated,  but  I  must  add  that  there  are  notable 
instances  where  even  a  preposterous  estimate  has  been 
recommended  to  the  public  in  good  faith  by  highly  repu- 
table authorities. 

For  example,  the  two  hundred  and  fifty  million  dollars 
in  the  Bank  of  France  have  been  talked  and  written  of 
as  if  the  sale  of  them,  supposing  the  present  price  main- 
tained, would  mean  a  loss  of  sixty  millions.  The  same  rea- 


DOLLARS    IN  THE    BANK    OF    FKANCE.  229 

soning  is  applied  to  other  Banks,  and  to  the  Government 
of  France,  and  other  States. 

The  use  made  of  such  erroneous  estimate  is  to  support 
the  proposed  wholesale  acceptance  of  silver  here,  with- 
out limit  of  amount  (or  source),  not  upon  trial,  not  as  an 
experiment,  not  as  a  measure  to  induce  European  nations 
to  come  forward  and  join  us  in  a  settlement,  but  as  a  per- 
manent establishment  based  on  unilateral  faith,  a  final 
committal  quite  independent  of  anything  Europe  may  in 
the  future  actually  do  to  disappoint  the  confidence,  so 
widely  professed,  in  what  Europe  is  going  to  do. 

Now  in  this  matter  a  mistake  would  mean  mischief. 
For  these  States  together  could,  if  the  United  States  made 
it  profitable  for  them,  quietly  absorb  all  the  gold  now 
in  the  United  States,  leaving  us  on  a  silver  basis  and  with- 
out hope  of  a  permanent  ratio. 

We  will,  therefore,  examine  the  supposition  and  en- 
deavor to  ascertain  what  inference  is  warranted  in  the 
premises. 

I  aver  that  the  Government  that  issued  such  coins, 
and  by  its  laws  maintains  them  at  a  fictitious  value, 
relatively  to  gold,  finds  in  them  no  real  guarantee  beyond 
their  metal  value,  present  or  prospective.  That  is  all  they 
are  really  "  worth  "  to  the  Government.  For  the  differ- 
ence between  their  metal  value  and  their  face  value,  they 
have  a  credit  value.  This  the  Government  can  destroy  or 
maintain.  The  Government  maintains  that  credit.  Thus 
full  legal  tender  silver  coin  to  the  face  value  of  near  a 


230  MEASURES    IN    AID    OF    DEMONETIZATION. 

thousand  million  dollars  is  kept  at  par,  at  this  nominal 
value,  in  the  Latin  Union,  Holland,  and  Germany. 

But  suppose  the  way  to  be  opened  to  these  Govern- 
ments to  sell  out  their  silver  stock  at  an  advance,  or  at 
the  present  price.  As  matters  stand  they  cannot  sell 
without  lowering  the  price.  But  the  supposition  we  are 
analyzing  is,  that  the  situation  is  changed  so  that  they 
can  sell  out.  And  the  object  of  the  inquiry  and  of  the 
conclusion  which  I  have  stated  to  be  preposterous,  is  to 
show  their  loss  would  be  enormous,  arid  therefore  there 
is  not  even  a  possibility  that  it  would  be  incurred.  It 
would  in  fact  appear,  from  such  reasoning,  that  no  induce- 
ments America  can  offer  will  draw  European  silver  across 
the  sea ! 

Now  I  find  such  a  sale  could  be  made,  in  the  supposed 
case  mentioned,  without  any  true  pecuniary  loss  at  all, 
except  a  slight  percentage  for  expenses — freight,  insurance, 
etc.,  between  Europe  and  New  York. 

Taking  the  case  of  the  Bank  of  France,  this  supposition 
implies  that  she  would  receive  190  million  dollars  of  gold 
instead  of  190  millions'  worth  of  silver,  coined  at  a  face 
value  of  250  millions. 

This  coin  is  in  use  as  a  deposit  for  bank  notes.  How 
large  an  issue  could  be  based  on  gold,  which  is  the  chief 
standard  rnetal,  the  only  international  money  of  the  West- 
ern Hemisphere  ?  Evidently,  if  the  Government  so  wished, 
the  convenience  or  advantage  of  maintaining  the  existing 
figures  of  monetary  stock  could  be  attained  with  gold  as 
well  as  silver,  and  thus  indemnity  for  any  apparent  loss 


EFFECT    ON   THE    GOLD    PRICE    OF    SILVER.          231 

be  easily  given  to  the  Bank.  The  actual  value  of  the  gold 
would  serve  as  security  for  not  less  an  amount  than  the 
nominal  value  of  the  silver. 

Where,  then,  is  the  loss  ?     It  does  not  exist. 

With  caution  which  in  some  cases  may  be  superfluous, 
I  again  remind  the  reader  that  this  supposition  with  which 
the  advocate  of  "  unlimited  and  unconditional  silver  "  seeks 
to  disarm  objection  is  merely  supposition,  or  rather  a  series 
of  suppositions;  supposed  cases,  however,  which  every 
business  man  must  fairly  face  if  he  wishes  to  deal  com- 
petently with  the  subject. 

Now  the  supposition  that  a  great  demonetization  or  sale 
could  take  place  without  depressing  the  gold  price  of  silver 
is  one  which  demands  extreme  effort  in  order  to  be  real- 
ized, and  only  the  extreme  measures  proposed  to  Congress 
could  for  a  time  compass  the  result  of  maintaining  silver 
at  its  price  in  such  event.  Here  then  is  the  strength  of  the 
case  against  demonetization.  And  here  is  shown  the  radi- 
cal difference  between  extreme  pro-silver  measures  and 
moderate  pro-silver  measures,  to  be  adopted  by  Congress. 

Europeans  can  be  depended  upon  to  recognize  that 
such  cashiering  of  silver  coin,  if  undertaken  in  Europe  on 
a  large  scale  (as  it  was,  for  example,  by  Germany),  in  the 
absence  of  extreme  measures  here,  would  defeat  the  object 
in  view  to  the  extent  of  not  keeping  up  the  gold  price  of 
silver. 

At  the  same  time  it  is  a  plausible  view  that  if  other 
countries  are  buying  up  silver,  demonetization  might  be 


232  MEASURES    IN    AID    OF    DEMONETIZATION. 

proceeded  with  so  gradually  as  to  make  the  substitu- 
tion of  gold  for  silver  productive  of  no  immediate  loss. 

It  may  be  taken  for  granted,  gold  being  the  accredited 
"  standard  "  of  the  western  nations,  that  there  is  an  anti- 
silver  party  in  each  important  country  of  Europe,  except- 
ing perhaps  Holland  and  Spain.  Of  such  a  party  in  its 
dormant  state  it  may  be  said,  they  would  like,  if  they  could, 
to  see  the  work  of  demonetizing  silver  completed,  each  in 
its  own  country,  but  not  in  other  countries.  Opposed  to 
them  there  is  in  each  country  a  silver  party,  with  its  va- 
rious respective  degrees  of  strength,  and  such  party  would 
endeavor  to  defeat  any  further  acts  of  demonetization, 
and,  on  the  contrary,  to  promote  joint  action  of  nations  to 
restore  silver,  so  that  existing  laws  excluding  silver  may  be 
repealed. 

We  are  investigating  the  anti-silver  side,  the  gold  party's 
side  of  an  account  of  the  effect  of  a  pro -silver  measure 
adopted  at  this  time  by  one  nation  alone.  Such  a  measure 
facilitates  demonetization  in  other  countries : 

so  far  as  it  enlarges  the  employment  for  silver, 
or  raises  the  price  of  silver. 

If  its  upward  '  push '  be  slight,  it  tends  to  enable  de- 
monetization to  proceed  gradually  without  loss,  because 
the  supposed  pro-silver  measure  will  prevent  a  fall  in  the 
price  of  silver.  If  its  upward  push  be  great,  it  makes  it 
more  profitable  to  demonetize.  For  those  who  insist  upon 
regarding  a  mere  liquidation  or  closing  out  of  an  account 
as  a  loss,  it  is  cheaper  or  less  expensive.  This  estimate 


EFFECT    IN    THE    FUTURE.  233 

thus  supposed  to  be  made  of  what  is  profitable,  or  cheap, 
refers  to  the  past. 

To  illustrate  :  Silver  being  at,  let  us  say,  72  cents  to  the 
dollar,  America  takes  measures  which  bring  it  where  it 
fluctuates  from  85  to  90.  That  enables  a  Treasury  to 
melt  and  put  on  the  London  market,  and  export 
to  Asia  and  Africa,  say,  20  millions  a  year  of  5 -franc 
pieces,  at  an  advance  of,  say,  20  per  cent,  on  what  the 
silver  in  them  was  worth  before.  Now,  these  20  millions 
are  only  1 J  per  cent,  of  the  silver  money  of  Europe  (count- 
ing change),  and  only  8  per  cent,  of  the  silver  stock  reg- 
ularly held  by  the  Bank  of  France  as  deposit  to  secure  its 
notes.  This  sale  would  be  very  profitable,  looking  merely 
to  the  past. 

How  is  it  as  to  the  future  ?  If  silver  is  going  higher, 
this  sale  will  not  seem  so  profitable.  It  will  seem  a  loss, 
not  of  actual  property,  but  of  possible  profit. 

I  now  give  a  brief  glance  to  the  forces  which  prevent 
acts  of  demonetization. 

As  I  have  abundantly  set  forth  on  other  pages  the 
interest  of  each  nation  in  Europe  is  that  stable  parity 
be  established  between  the  money-metals,  and  hence 
in  the  true  account-keeping  of  national  interests  acts  of 
demonetization  are  injurious  to  the  State.  The  policy 
proposed  in  the  Conference  of  1878  was  right — right 
for  each  nation.  The  gold  party  are  wrong  in  each  nation. 
The  silver  party  are  right. 

But  this  was  true  in  1873,  1876,  1878,  1881,  and  has 
been  true  ever  since.  And  yet  the  Silver  Question  is  still 


234  MEASURES    IN    AID    OF    DEMONETIZATION. 

the  Silver  Question !  Error  once  in  the  saddle  is  slow  to 
dislodge.  Prejudice,  dogmatism,  and  the  inertia  of  na- 
tions make  a  mighty  combination.  The  silver  party  are 
not  yet  in  control  so  as  to  bring  Germany  and  England 
to  meet  the  requirements  of  other  nations.  And  mone- 
tary policy  is  exposed  to  all  the  hazards  of  politics. 

At  the  same  time  there  is  a  peculiarity  of  monetary 
politics  which  has  its  favorable  as  well  as  its  unfavorable 
side.  With  such  a  risky  subject  the  odds  are  in  favor  of 
doing  nothing.  And  Europe  has  done  nothing  important 
in  the  way  of  demonetization  since  May  16, 1879,  when  the 
sale  of  the  German  stock  of  thaler-bullion  was  stopped. 

It  may  be  of  interest  to  refer  in  postscript  to  a  peculiar 
effect  of  the  extent  of  the  rise  of  silver  supposed  to  be  pro- 
duced by  a  measure  taken  by  one  nation  without  guarantees 
from  others.  There  is  a  maximum  price  here  for  silver,  that 
is,  100  cents  on  the  gold  dollar  (at  15.98  to  1).  It  cannot  go 
beyond  that.  This  maximum  is  fixed  by  the  existence  of  our 
silver  dollars,  which  would  bear  down  any  influences  which 
might  tend  to  make  the  silver  worth  more  than  the  gold 
dollar.  As  silver  approaches  the  maximum,  the  profit  of 
demonetization  becomes  greater,  but  the  motive  for  de- 
laying such  action  becomes  weaker. 

For  example,  let  us  suppose  that  Europeans  think  there 
is  a  good  chance  that  America  will  raise  silver  from 
72  cents  to  1  dollar  (15.98  to  1).  They  would  natu- 
rally wait  for  a  rise  before  selling.  To  induce  them  to 
wait  till  the  rise  reaches  90  there  is  the  gain  of  18  points 
on  72,  or  25  per  cent.  For  the  balance  of  the  possible 
rise,  the  "  pull,"  the  argument  in  favor  of  waiting,  is  only 
10  points  on  90,  or  11  per  cent.  So  the  inducement  to 
wait  after  silver  reaches  90  is  less  than  half  what  it  was  at 
the  start. 


APPENDIX. 

THE   ANTI-SILVER  MOVEMENT  AND   ITS 
REVERSAL. 


235 


THE  ANTI-SILVEK  MOVEMENT  AND  ITS 
KEVEKSAL. 

A  DOCUMENTARY  CHEONICLE. 


I. 

INTRODUCTORY 

The  documents  of  proof  and  justification  hereinafter  re- 
printed should  be  regarded  in  perspective  as  connected 
with  the  events  now  to  be  stated  in  brief ;  for  if  thus  seen 
they  assume  their  true  positions  relatively  to  each  other. 
They  will  also  be  found  in  harmony  with  these  fundamental 
truths — 

That  the  joint  acts  of  nations  in  breaking  up  an 
established  parity  between  the  two  parts  of  the  world's 
money  owed  their  origin  to  mistake,  to  the  mis-education 
of  public  opinion,  rather  than  to  the  self-interest  of  any 
class.  With  error  everywhere  prevalent  among  the  learned, 
the  actual  adoption  of  anti-silver  measures  came  as  a 
product  of  organized  agitation  and  of  political  management. 
It  is  upon  these  same  lines  that  the  concurrent  repeal  of 
anti-silver  laws  in  various  nations  is  to  be  attained :  first, 
education — the  conversion  of  proficient  advisers  of  public 
opinion  in  the  several  countries — and  in  aid  of  this,  agita- 
tion, organized  agitation,  and  all  the  political  management 
that  can  be  brought  to  bear.  Of  such  management  '  inter- 
national strategy '  is  the  highest  form. 

237 


238  APPENDIX. 

THE  SUCCESSIVE  STEPS  IN  THE  OUTLAWRY  OF  SILVER. 

The  Conference  of  1867  at  its  seventh  session  adopted 
unanimously  the  following  resolutions  : 

The  Conference  expresses  the  hope  that  the  measures  taken 
by  the  governments  of  the  different  states  to  modify  their 
monetary  system,  in  conformity  with  the  basis  laid  down  by 
the  Conference,  may  end  in  diplomatic  conventions. 

As  soon  as  answers  shall  be  received  from  the  different 
states  to  the  communication  officially  made  to  them  of  the 
labors  of  the  Conference  by  the  French  government,  that 
government,  in  accordance  with  the  answers  that  may  be  re- 
ceived, will  call  a  new  Conference,  if  necessary. 

The  following  paragraph  was  also  adopted,  except  as  to 
the  date,  the  United  States  voting  for  the  date  May  15  and 
Great  Britain  for  June  1,  1868  : 

It  is  desirable  that  answers  should  be  received  before  the 
\5th  of  February  next. 

The  first  overt  act  of  Government  following  upon  these 
recommendations  was  a  Franco-Austrian  Preliminary 
Treaty  of  July  3,  1867,  as  to  the  8-florin  piece.  In  the 
Scandinavian  countries  a  movement  was  at  once  set  on 
foot,  which  finally  culminated  in  the  Report  of  the  Swedish 
Monetary  Commission  (published  in  1871),  and  in  the 
several  successive  steps  taken  to  reduce  the  legal  position 
of  silver  in  the  Scandinavian  Union,  definitively  estab- 
lished by  the  Treaty  of  Sweden  and  Denmark,  of  Decem- 
ber 18,  1872.  The  Treaty  of  Accession  of  Norway  was 
of  date  October  16,  1875. 


INTRODUCTORY.  239 

No  action  of  great  moment  followed  in  other  countries 
until  after  the  Franco-Prussian  war,  when,  by  the  Act  of 
December  4,  1871,  the  new  German  Empire  assumed  the 
sovereign  right  of  coinage,  established  a  gold  unit  (the 
"  mark  ")  at  15^  to  1,  and  stopped  the  mintage  of  silver. 
The  act  of  July  9,  1873,  completed  the  provision  for  the 
new  Imperial  gold  money  with  silver  change,  and  provided 
for  the  retirement,  melting,  and  sale  of  the  existing  silver 
coin  of  the  German  States.  The  German  silver  sales 
reached  a  total  of  about  140  millions  of  dollars'  worth. 
They  were  stopped  on  May  16,  1879,  leaving  about  150 
million  thalers  full  legal  tender  in  Germany. 

In  France  a  Treasury  Order  of  September  6, 1873,  limi- 
ted the  amount  of  silver  to  be  accepted  by  the  Mint,  and 
thereafter  a  limited  coinage  of  quotas  was  agreed  upon, 
from  time  to  time,  by  the  States  of  the  Latin  Union.  In 
France  silver  mintage  was  stopped  in  1876. 

In  Holland  the  Act  of  June  6,  1875,  suspended  the 
mintage  of  silver  for  private  account,  and  established  a 
gold  coinage. 

In  the  United  States  a  Bill  to  '  discontinue  the  silver 
dollar  '  was  presented  in  Congress  in  January,  1868.  It 
was  also  proposed  to  reduce  the  gold  coins,  one  Bill 
making  the  half  eagle  of  equal  weight  with  the  25-franc 
piece,  another  with  the  sovereign.  These  subjects,  how- 
ever, were  then  doubly  removed  from  actuality,  the  money 
of  the  country  being  chiefly  paper,  in  which  gold  was  at  a 
premium,  while  silver  again  was  at  a  premium  above  gold. 
Two  years  later  a  measure  discontinuing  the  silver  dollar, 


240 


APPENDIX. 


which  had  been  maturely  prepared  by  Treasury  officials, 
was  recommended  to  Congress  by  the  Secretary.  The  Act 
was  finally  passed  and  approved  February  12,  1873. 


THE  RATIO  SINCE  1870. 

The  annual  average  ratio    of    Silver    Bullion  to  Gold 
Money  in  London  is  given  by  various  authorities  as  fol- 


lows : 

Silver  to  Gold. 

1869-70 15.60  to  1 

1871 15.50 

1872 15.64 

1873 15.93 

1874 16.13 

1875 16.63 

1876 17.80 

1877 17.19 

1878  .  17.96 


1879 


18.39 


Silver  to  Gold. 

1880 18.00  to  1. 

1881 18.24 

1882 18.27 

1883 18.65 

1884 18.63 

1885 19.39 

1886 20.78 

1887 21.10 

1888 21.98 

1889..  .  about  21.50 


The  lowest  figure  in— 

Silver  to  Gold. 

1876  .  . .   20.17  to  1.      1888 


Silver  to  Gold. 

22.65  to  1. 


The  Silver  Dollar  of  the  United  States  stands  at  the  ratio 
to  gold  of  15.98  *  to  1.  Its  bullion  value  was  70£  cents 
(0.70574),  at  the  lowest  figure  yet  reached — 41f  pence  to 
the  ounce  "standard"  in  London  in  1888,  equivalent  to  a 
ratio  of  22.65  to  1. 


*  Or  rather,  15.988372095023093023,  but  usually  called  16. 


II. 

THE  WORK  OF  THE  CONFERENCE  OF  1867. 
REPORT  OF  MB.  DE  PARIEU. 

At  the  eighth  and  last  session,  Saturday,  July  6,  1867, 
on  invitation  from  His  Imperial  Highness,  Prince  Jerome 
Bonaparte,  the  President  of  the  Conference,  M.  de  Parieu, 
the  Vice-President,  read  the  following  report :  * 

Monseigneur  and  Gentlemen .' 

In  the  month  of  December  last,  when  the  French  gov- 
ernment communicated  the  International  Convention  of 
the  23d  December,  1865,  to  the  States  here  represented, 
and  called  their  attention  to  the  grand  idea  of  monetary 
uniformity,  those  communications  Avere  at  first  received 
with  a  certain  hesitation  in  some  particulars.  We  have 
been,  perhaps,  too  long  accustomed  to  consign  many  gen- 
erous ideas,  sustained  only  by  common  sense,  to  the  region 
of  dreams,  leaving  them  to  be  buried  by  prejudice  and  the 
blind  consideration  of  the  immutability  of  existing  facts. 
We  all  know  that  every  enterprise  of  general  interest  re- 
quires a  spirit  of  unity  in  its  aims  and  principal  means  of 
accomplishment. 

There  were  many  points  in  the  monetary  question  so 
difficult  that  they  caused  divisions  in  the  doctrines  and 
the  views  of  the  past. 

The  idea  of  monetary  uniformity  long  languished  in 
the  aspirations  of  poets  and  economists.  The  members  of 


*As  given  in  translation  accompanying  Mr.  Kuggles's  Keport. 


242  APPENDIX. 

the  Convention  of  the  23d  of  December,  1865,  encouraged 
by  the  success  of  their  labors,  warmly  welcomed  the  prac- 
tical idea  of  their  extension  ;  and  on  witnessing  the  success 
of  the  monetary  union  concluded  between  France,  Belgium, 
Switzerland,  and  Italy,  notwithstanding  the  false  situation 
caused  by  the  forced  circulation  of  paper  in  one  of  the 
States,  it  was  hard  for  the  government  that  had  presided 
over  the  Conference  of  1865  to  refrain  from  asking  the 
support  of  the  world  for  a  more  extended  monetary  uni- 
formity. 

The  Minister  of  Foreign  Affairs  has  told  you  how  much 
the  imperial  government  was  pleased  at  the  eagerness  of 
all  the  sovereign  States  of  Europe  and  of  the  government 
at  Washington  in  sending  delegates  to  the  Conference  pro- 
posed to  them.  In  giving  to  the  assembly  a  president 
whose  great  name,  exalted  position,  manifest  impartiality, 
and  decided  sympathy  for  monetary  uniformity  have  given 
our  discussions  a  brilliancy  and  importance  that  we  could 
not  expect  from  our  own  resources,  it  has  complimented 
you  more  highly  than  could  be  done  by  words,  and  has 
thanked  you  all,  men  distinguished  for  diplomatic  merits, 
economical  science,  or  technical  experience  in  the  mone- 
tary art,  for  the  earnest  welcome  you  have  given  to  the 
ideas  you  were  called  together  to  examine. 

What  was  the  precise  object  of  your  Conference,  the 
nature  of  the  questions  it  was  to  expound? 

This,  gentlemen,  was  the  first  object  of  your  reflections, 
and  upon  it  the  success  of  your  meeting  depended.  The 
government  of  the  Emperor  might  prepare  the  studies,  but 
it  could  not  fix  the  terms. 

Monetary  science  is  vast ;  many  of  its  problems  are  de- 
bated by  philosophers.  Not  one  could  be  avoided.  Ap- 
peals were  to  be  made  to  reality,  the  only  solvent  of  such 


WORK    OF    THE    CONFERENCE    OF    1867.  243 

problems,  and  the  one  of  particular  importance  in  the 
subject  now  before  us  for  consideration. 

At  the  Trade  Conference  of  1864,  in  Frankfort,  it  was 
truly  said,  "  monetary  questions  are  more  practical  than 
all  others." 

The  chief  question  for  examination  was  the  monetary 
standard. 

On  this  subject  you  are  aware  that  the  world  is  divided 
between  three  different  systems — the  gold  standard,  the 
silver  standard,  and  the  double  standard.  It  was  indis- 
pensable to  know  which  of  these  forms  would  furnish  the 
most  desirable  and  permanent  basis  for  a  monetary  unity. 

Governed  by  these  considerations,  you  have  agreed  upon 
a  series  of  questions  as  the  basis  of  your  labors,  on  the 
report  of  a  committee  of  seven  members,  in  the  formation 
of  which  all  the  systems  had  been  equitably  represented. 

This  '  questionnaire,'  to  adopt  a  neologism  of  our  admin- 
istrative language,  you  unanimously  adopted  in  the  follow- 
ing terms : 

"  1st.  What  is  the  best  way  to  realize  monetary  unity — 
by  the  creation  of  an  entirely  new  system  independent  of 
existing  systems,  and  in  that  case  what  should  be  the  basis 
of  that  system  ;  or,  by  the  combination  of  present  sys- 
tems, taking  into  consideration  the  scientific  advantages 
of  certain  types,  and  the  number  of  nations  that  have  al- 
ready adopted  them  ?  In  the  latter  case,  what  monetary 
system  ought  to  be  chiefly  considered,  with  the  reserve  of 
any  improvement  that  might  be  made  in  it  ? 

"  2d.  Can  identities  or  partial  assimilations  of  monetary 
types  be  now  constituted  on  a  large  scale  by  adopting  the 
silver  standard  exclusively  ? 

"  3d.  On  the  other  hand,  can  that  result  be  reached  by 
adopting  a  gold  standard  exclusively  ? 


244  APPENDIX. 

"  4th.  Could  a  similar  result  be  obtained  by  adopting 
the  double  standard,  and  fixing  in  all  the  nations  the  rel- 
ative value  of  gold  and  silver  ? 

"  5th.  In  case  of  a  negative  response  to  the  preceding 
questions,  is  it  possible  or  expedient  to  establish  identity 
or  partial  assimilation  of  monetary  types  on  a  large  scale 
with  a  silver  standard,  leaving  each  state  the  liberty  of 
preserving  its  gold  standard  ? 

"  6th.  Is  it  possible  and  useful  to  establish  identity  or 
partial  assimilation  of  monetary  types  on  a  gold  basis, 
leaving  each  state  the  liberty  of  preserving  its  silver 
standard  ? 

"  7th.  In  case  of  affirming  one  of  the  two  preceding 
questions,  would  the  internationality  of  the  coin  adopted 
as  a  common  standard  be  a  sufficient  assurance  of  its  con- 
tinued circulation  in  each  state,  or  would  it  be  necessary 
to  stipulate  a  certain  limit  in  the  relation  between  the 
value  of  gold  and  silver,  or  to  provide  for  the  case  in  which 
international  coins  would  run  the  risk  of  being  expelled 
from  circulation  in  any  of  the  contracting  states  ? 

"  8th.  For  the  success  of  monetary  unity  is  it  necessary 
to  constitute  an  identical  unity  of  metallic  composition 
everywhere  with  similarity  of  weight  and  denomination, 
and  what  basis  is  to  be  adopted  ;  or  is  it  enough  to  con- 
stitute common  types  of  a  common  denominator  as  high 
as  multiples  of  5  francs  for  gold  ? 

"  9th.  In  case  gold  is  adopted  as  an  international  metal, 
would  it  be  useful  for  the  types  of  that  coin  adopted  by 
the  Monetary  Convention  of  the  23d  of  December,  1865, 
to  be  completed  by  new  types  of  15  and  25  francs  for  the 
sake  of  unity  and  in  the  spirit  of  reciprocity  ?  In  this 
case  what  should  be  their  dimensions  ? 

"  10th.  In  case  of  affirmative  to  questions  three  or  six, 


WORK    OF    THE    CONFERENCE    OF    1867.  245 

would  it  be  useful  to  regulate  silver  or  copper  coins  by 
common  obligations  as  to  their  composition  or  standard, 
their  limit  in  payment,  or  the  amount  of  their  issue  ? 

"  llth.  Would  it  be  proper  to  fix  certain  means  of  con- 
trol to  insure  the  exact  coinage  of  the  common  types  of 
the  international  money  ? 

"  12th.  Besides  the  immediate  practical  possibilities  al- 
ready discussed,  would  further  discussions  of  general 
principles  be  desirable  to  spread  over  Europe  the  assim- 
ilations already  effected  or  hereafter  to  be  realized  in  re- 
spect to  money?  " 

Although  no  idea  of  exclusion  has  entered  into  this 
"  questionnaire,"  it  is  remarkable  that  its  discussion  dur- 
ing five  sittings  has  suggested  no  serious  addition  ;  on  the 
contrary,  the  10th  and  llth  questions  you  have  put  off, 
although  the  principle  of  measures  of  control  has  been 
judged  indispensable  to  the  success  of  the  monetary  con- 
ventions, and  the  12th  question  was  left  undecided. 

The  decisions  of  the  Conference,  as  a  whole,  have  been 
regulated  by  the  dominant  desire  that  any  future  monetary 
legislation  shall  result,  as  far  as  practicable,  in  diplomatic 
conventions  between  different  states,  to  secure  them  against 
their  own  inconstancy.  It  is  the  evident  interest  of  the 
states  to  secure  the  political  advantages  of  the  assimila- 
tion of  their  monetary  types  by  the  reciprocal  circulation 
of  their  coins. 

You  did  not  think  the  reciprocal  circulation  in  public 
banks,  as  resolved  upon  in  1865,  completely  answered  the 
aspirations  for  a  monetary  uniformity  ;  and,  contrary  to 
some  reserves  found  in  your  minutes,  you  thought  legal 
currency  ought  to  be  considered  the  last  word  in  the  ten- 
dencies to  unity. 

The  nine  first  questions  of  your  sittings  are  comprised 


246  APPENDIX. 

in  three  formulas  too  abstract  to  be  discussed,  and  I  will 
reduce  them  to  their  simplest  form  of  expression. 

The  whole  world  agreeing  upon  the  benefits  to  be  de- 
rived from  monetary  unity,  but  the  difficulties  and  delays 
of  effecting  it  being  very  apparent,  the  question  is,  How 
can  it  be.  effected  ?  By  the  creation  of  a  new  monetary 
system  established  a  priori,  or  by  strict  adhesion  to  exist- 
ing systems,  or  simply  by  bending  them,  so  to  speak,  and 
perfecting  them  hereafter  ? 

Such  was  the  triple  problem  proposed  for  your  solution. 

All  of  your  states,  except  Belgium,  have  agreed  not  to 
propose  a  new  system,  lest  such  an  undertaking  might  in- 
definitely delay  the  desired  monetary  assimilation. 

A  new  system  would  have  probably  been  founded  upon 
the  adoption  of  a  decimal  gold  piece  of  a  certain  weight 
as  a  unity.  You  do  not  say  that  such  a  regularity  could  be 
attained  without  difficulty,  however  beautiful  it  might  be 
in  theory,  and  without  disturbing  inveterate  habits  found 
in  the  attachment  to  the  silver  franc,  almost  a  copy  of  the 
old  French  livre  tournois. 

Instead  of  seeking  a  system  new  in  all  its  parts,  you 
have  preferred  to  adopt  that  of  the  Monetary  Convention 
signed  at  Paris  on  the  23d  of  .December,  1865,  and  which, 
being  now  adopted  by  Borne  and  Athens,  seems  by  a  for- 
tunate coincidence  to  reunite  the  greater  portion  of  the 
countries  in  which,  at  the  close  of  ancient  history,  civili- 
zation by  various  modes  had  marked  out  the  perimeter  of 
its  first  empire. 

The  close  union  of  this  system,  in  its  silver  coins,  with 
the  metrical  weights,  whether  the  coins  be  considered  as  a 
distinct  standard  or  as  small  change,  and  the  72,000,000 
of  people  that  use  it  and  are  attached  to  it,  have  made  you 
regard  it  as  a  centre  of  assimilation  around  which  the  ef- 


WORK    OF    THE    CONFERENCE    OF    1807.  247 

forts  of  other  nations  might  cluster  with  probabilities  of 
success.  But  you  did  not  look  upon  the  system  as  fixed 
and  perfect. 

You  rightly  thought  it  capable  of  contraction  or  exten- 
sion ;  that,  though  the  unit  was  called  a  franc  here,  a  lira 
there,  and  a  drachma  elsewhere,  still  a  greater  latitude  was 
possible,  particularly  in  regard  to  the  unit  value. 

Most  of  the  civilized  nations  have  a  monetary  unity  above 
a  franc  in  value,  the  piastre,  the  thaler,  the  ruble,  and  the 
dollar,  four  pieces  similar  in  origin  and  name,  are  nearly, 
the  quadruple  or  quintuple  of  the  unit  adopted  in  the 
convention  of  1865. 

If  the  German  and  Dutch  florins  and  the  Spanish  crowns 
differ  less  from  the  franc,  on  the  other  hand  the  wealthy 
British  civilization  places  its  monetary  unit  much  higher 
in  value. 

Though  the  small  Roman  state  has  converted  its  scudo, 
similar  to  the  piastre  and  dollar,  into  francs,  we  can  hardly 
hope  that  larger  and  more  populous  states  will  immedi- 
ately adopt  all  the  monetary  unities  we  have  reported  in 
the  convention  of  the  23d  of  December,  1865.  You  have, 
therefore,  thought  proper  to  suggest  a  single  unit  as  a 
common  denominator,  borrowed,  from  the  system  of  the 
convention,  around  which  the  other  unities  should  circu- 
late. 

If  silver  had  been  adopted  for  the  unitary  basis,  all 
other  systems  might  have  been  assimilated  to  the  franc  as 
a  common  denominator.  But  could  the  silver  franc  have 
been  the  pivot  of  equations,  commensurabilities  and  coin- 
cidences desired  in  the  monetary  systems  we  would  like  to 
make  universal  for  the  benefit  of  exchange,  trade,  travel, 
financial,  statistical,  and  scientific  operations  ?  To  a  cer- 


248  APPENDIX. 

tain  extent,  this  was  the  chief  question  for  your  delibera- 
tions. 

Here  the  laws  that  brought  the  precious  metals  into 
contact  with  the  wealth  of  communities,  and  which  have 
twice  given  a  monetary  system  to  the  universe,  came  into 
consideration.  The  rule  of  these  laws  was  broken  by  the 
great  historic  catastrophe  that  separated  ancient  from 
modern  civilization  by  an  intermediate  period  of  poverty 
and  barbarism,  but  now  strikingly  reproduced  after  a  lapse 
of  nearly  eighteen  centuries. 

In  the  time  of  Augustus,  when  gold  had  gained  the  as- 
cendancy in  money  circulation,  the  Roman  poet  exclaimed  : 

J3ra  dabant  olim  ;  melius  nunc  omeii  in  auro  est, 
Yictaque  concedit  prisca  moneta  novae. 

From  the  middle  ages  to  our  day,  the  revolution  that 
Ovid  mentions  incompletely,  for  he  omits  silver,  has  lain 
quiet,  till  it  breaks  out  now  with  renewed  strength  and  pe- 
culiar mineralogical,  industrial,  and  commercial  circum- 
stances. No  new  invasion  of  barbarism  can  reverse  its 
course  in  Europe,  where  silver  first  took  the  place  of  iron 
and  copper,  and  where  silver  is  now  displaced  by  gold. 

In  most  of  the  civilized  nations  of  Europe  and  America 
the  latter  metal  has  become  the  principal  instrument  of 
circulation,  because  its  portability  and  density  particularly 
recommend  it  as  the  material  for  monetary  unity.  When 
the  convention  of  the  23d  September,  1865,  closed,  three 
of  the  associate  states  wished  gold  to  be  the  choice  of  the 
convention.  Even  in  the  last  century,  a  learned  man  of 
Germany,  where  so  many  grand  ideas  originate,  declared 
that  gold  was  destined  to  become  the  bond  of  the  mone- 
tary systems  of  the  universe. 

By  a  most  singular  coincidence,  Avhen  only  two  out  of 


WORK    OF    THE    CONFERENCE    OF    1867.  249 

twenty  states  had  gold  for  a  standard,  your  conference 
decided  upon  it  for  the  standard,  with  silver  as  a  transitory 
companion ;  and  this  was  done  because  the  double  stand- 
ard was  necessary  in  certain  states  that  were  used  to  it, 
or  where  silver  was  the  exclusive  standard. 

This  valuable  unanimity  on  a  question  so  important, 
tending  to  perfect  the  monetary  system  of  the  convention, 
of  1865,  will  certainly  influence  public  opinion,  and  cer- 
tain men  in  the  interior  of  states  who  may  have  retained 
any  doubt  on  the  question. 

In  thus  adopting  gold  as  a  basis  for  the  desired  union, 
it  was  only  in  a  common  denominator  above  the  franc  that 
it  was  possible  to  realize  the  useful  equations  and  fre- 
quent coincidences  in  the  systems  to  be  brought  together  ; 
for,  in  gold  coins,  the  very  minute  differences  could  not  be 
distinguished  with  precision  by  the  process  of  coinage, 
and  already  the  mere  distance  of  five  francs  may  be  some- 
times difficult  to  express  sufficiently  in  the  external  form 
of  the  monetary  disks. 

The  weight  of  five  francs  in  gold  of  nine-tenths  fine- 
ness, the  standard  which  was  unanimously  approved,  and 
also  one  of  the  conditions  of  the  convention  of  1865,  then 
appeared  to  be  the  proper  denominator  for  the  basis  of 
the  desired  assimilation  between  the  monetary  systems  of 
the  twenty  states  represented. 

You  are  aware  that  the  coins  of  the  union  of  1865  are 
already  grouped  around  this  denominator. 

For  example,  it  was  shown  how  near  the  type  of  25 
francs  came  to  the  pound  sterling,  the  half-eagle  of  5  dol- 
lars, and  a  piece  adopted  by  the  Vienna  conference  to 
represent  the  value  of  ten  florins.  This  type  of  25  francs, 
especially  recommended  in  the  conference  by  the  repre- 
sentatives of  Austria  and  of  the  United  States,  has  been 


250  APPENDIX. 

unanimously  accepted  by  the  states  that  voted  in  the  dis- 
cussion of  question  nine,  but  on  optional  conditions. 

Your  opinions  were  more  divided,  in  fact  equally,  in  re- 
gard to  the  utility  of  recommending  at  present  a  gold 
piece  of  15  francs,  the  approximate  equation  of  7  florins 
of  the  Netherlands  and  South  Germany,  and  of  4  thalers 
of  North  Germany.  But,  without  recommending  this 
type,  as  you  did  that  of  25  francs,  you  nevertheless  agreed 
that,  if  circumstances  rendered  it  proper,  it  would  be  open 
to  no  serious  objection  in  itself,  unless  it  might  be  in  the 
delicacy  of  the  process  for  coining  it  distinctly. 

The  eventual  extension  of  the  types  of  gold  coins  would 
necessitate,  a,  fortiori,  for  the  states  that  desired  it,  correla- 
tive latitude  in  the  forms  of  their  silver  coins,  the  interna- 
tionally of  which  is  of  less  importance. 

Such,  gentlemen,  are  the  simple  but  instructive  and 
plain  bases  that  you  have  thought  proper  to  accept  as  a 
sort  of  siege  to  the  citadel  of  monetary  diversity,  the  fall 
of  which  you  would  like  to  behold,  or,  at  least,  to  grad- 
ually destroy  its  walls,  for  the  benefit  of  the  daily  increas- 
ing commerce  and  exchanges  of  every  description  among 
the  different  members  of  the  human  family. 

The  desire  of  not  detaining  you  longer,  gentlemen,  after 
a  session  of  three  weeks,  is  my  apology  for  the  imperfec- 
tion of  this  hastily  written  digest,  which  is  made  in  the 
hope  that  some  decision  may  be  reached  by  the  middle  of 
February,  1868,  or  at  least  some  instructive  steps  taken 
by  the  governments  that  have  sent  you  to  this  Conference. 

If  the  germs  of  our  collective,  enlightened,  and  benevo- 
lent aspirations,  freed  from  the  unpleasant  compensations 
that  sometimes  attend  the  most  seductive  reforms,  in 
which  we  are  all  animated  by  the  true  spirit  of  civilization 
and  modern  progress,  shall  come  to  fructify  around  you,  I 


WOEK    OF    THE    CONFERENCE    OF    1867.  251 

hope,  gentlemen,  you  will  pleasurably  recall  the  honorable 
memories  of  the  part  you  have  taken  in  these  delicate 
scientific  discussions,  with  the  satisfaction  of  their  joint 
pursuit,  under  a  presidency  so  memorable,  and  with  a 
facility  and  harmony  as  perfect  as  that  of  delegates  from 
a  single  nation  in  its  ordinary  deliberations. 

E.  DE  PARIEU, 
Vice-President  of  the  International  Monetary  Conference. 


III. 

THE  GERMAN  COMMERCIAL  CONVENTION 

OF  1868. 

One  hundred  and  nineteen  German  cities  were  repre- 
sented in  this  Convention.  The  organization  of  the  earlier 
llandelstag  has  been  kept  up  by  a  Permanent  Committee  of 
fifteen,  of  which  Dr.  Adolf  Soetbeer,  of  Hamburg,  whose 
literary  activity  in  monetary  matters  began  in  1846,  was  a 
prominent  member.  The  following  resolution  was  pre- 
sented by  him  as  Official  Reporter  on  the  question  of  the 
Standard  at  the  first  session,  and  was  debated  at  length 
and  adopted  at  the  following  session.  It  will  be  apparent 
upon  consideration  of  the  resolutions,  that  that  basis  of 
public  favor  which  made  it  possible  for  the  German  Par- 
liament in  1871  and  1873  to  establish  the  Gold  Standard, 
was  largely  the  artificial  product  of  an  ably-directed,  per- 
severingly-pursued,  literary  agitation  which  disseminated 
among  the  business  men  throughout  Germany  an  enthu- 
siasm for  the  principles  identified  with  the  name  of  Dr. 
Soetbeer  and  with  the  Conference  of  1867. 

RESOLUTION  ADOPTED. 

Inasmuch  as  the  measures  recommended  by  the  First 
German  Commercial  Convention,  in  Heidelberg,  May, 
1861,  and  by  the  Third  Commercial  Convention,  in  Frank- 
Extract  from  the  Report  of  the  Proceedings  of  the  Fourth  German 
Commercial  Convention  (Handelstag}  held  at  Berlin  between  the  20th  and 
23d  October,  1868.  Reprinted  from  the  Document  of  the  Conference  of 
1878. 

252 


THE    GERMAN    COMMERCIAL    CONVENTION.  253 

fort-on-the-Main,  September,  1865,  for  the  purpose  of 
securing  monetary  unity  in  Germany,  have  not  met  with 
earnest  attention  or  practical  acceptance  at  the  hands  of 
the  German  Government,  and  as  there  are  no  signs  that 
such  attention  or  acceptance  will  be  accorded  to  them  ; 
and  inasmuch  as  a  plan  of  a  Universal  International  Mon- 
etary Union  on  the  basis  of  the  Gold  Standard  has  been 
elsewhere  adopted  with  zeal,  and  is  being  pursued  with 
perseverance  ;  and  especially  inasmuch  as  the  proceedings 
of  the  International  Monetary  Conference  which  met  in 
Paris  in  the  year  1867,  in  which  also  the  Plenipotentia- 
ries, of  Prussia  and  of  other  German  States  took  part, 
have  now  been  made  known,  the  German  Commercial  Con- 
vention in  its  present  fourth  assembly  pronounces  itself 
to  the  following  effect : 

1.  The   speedy   attainment   of  a   practicable   monetary 
unity  in  all  German  States  is  now,  as  formerly,  regarded 
as  exceedingly  important  and  desirable. 

2.  As  far  as  the  special   scheme  of  the  future  unified 
German   monetary  system   is  concerned  the  propositions 
for  a  unified  reckoning  by  marks  (thirds  of  a  thaler),  the 
Silver  Standard  being  retained,  which  was  abandoned  by 
the  Conventions  of  1861  and  1865,  are   withdrawn,  and, 
on  the  contrary,  the  following  recommendations  are  made : 

3.  Monetary  unity,  and  at  the  same  time  such  a  general 
monetary  reform  as   befits  the   age,  can  be  brought  about 
by  the  adoption,  at   the   same   time,  by   all  the    German 
States  of  the    Single  Standard  with  full   application    of 
the  Decimal  System,  in  pursuance  of  the  principles  recom- 
mended  by  the  International   Monetary    Conference    of 
Paris  in  its  report  of  the  6th  July,  1867. 

4.  As  far  as  relates  to  the  future  German  monetary  sys- 
tem after  the  adoption  of  the  Gold  Standard,  special  notice 


254  APPENDIX. 

is  directed  to  the  proposition  to  introduce  unit  of  value 
and  of  account  equivalent  to  the  Gold  five-franc  piece 
with  its  decimal  multiples  and  its  division  into  100  shil- 
lings, or  to  adopt  for  a  unit  of  account  the  gulden  as  the 
tenth  part  of  a  principal  Gold  Coin  identical  with  the 
25-franc  piece,  and  divided  into  100  kreuzers. 

The  Commercial  Convention,  in  presenting  a  collection 
of  written  opinions  concerning  the  transition  to  the  Gold 
Standard,  and  the  proceedings  of  the  present  meeting,  pe- 
titions the  August  Presidency  of  the  North  German  Con- 
federation, as  well  as  the  August  Governments  of  Bavaria, 
Wurttemberg,  Baden,  and  Hessen,  without  delay  to  take 
appropriate  measures  in  order  that  a  uniform  monetary 
system  of  the  kind  before  mentioned  may  be  agreed  upon, 
and  as  soon  as  possible  be  laid  before  the  North  German 
Diet  and  before  the  Legislatures  of  the  South  German 
States  for  their  acceptance  in  constitutional  form,  in  order 
that,  if  by  any  means  it  be  practicable,  the  monetary  re- 
form may  take  effect,  at  the  latest,  on  January  1,  1872,  at 
the  same  time  with  the  new  System  of  Weights  and  Meas- 
ures, which  already  has  been  published  as  law  in  the 
States  of  the  North  German  Confederation,  the  early 
adoption  of  which  in  the  South  German  States  is  also 
strongly  to  be  desired. 

The  Permanent  Committee  is  herewith  authorized  to 
adopt  such  measures  as  may  be  necessary  to  further  the 
object  of  the  pending  resolution. 


IV. 

THE  PKOPOSALS  OF  THE  UNITED  STATES 
BEFOKE  THE  CONFEBENCE  OF  1878. 

At  the  second  session,  on  the  16th  of  August,  the  Com- 
missioners of  the  United  States  submitted  the  two  follow- 
ing propositions  : 

I. 

It  is  the  opinion  of  this  Assembly  that  it  is  not  to  be 
desired  that  Silver  should  be  excluded  from  Free  Coinage 
in  Europe  and  the  United  States  of  America.  On  the  con- 
trary, the  Assembly  believes  that  it  is  desirable  that  the 
Unrestricted  Coinage  of  Silver,  and  its  use  as  Money  of 
Unlimited  Legal  Tender,  should  be  retained  where  they 
exist,  and,  as  far  as  practicable,  restored  where  they  have 
ceased  to  exist : 

II. 

The  use  of  both  Gold  and  Silver  as  Unlimited  Legal- 
Tender  Money  may  be  safely  adopted. 

First. — By  equalizing  them  at  a  relation  to  be  fixed  by 
international  agreement ;  and 

Secondly. — By  granting  to  each  metal,  at  the  relation 
fixed,  equal  terms  of  Coinage,  making  no  discrimination 
between  them. 

The  following  third  proposition  was  prepared  and  held 
Extract  from  the  Report  of  the  American  Commission.     (Page  213.) 

255 


256  APPENDIX. 

in  reserve,  awaiting  the  development  of  the  views  of  the 

Conference  : 

III. 

"  The  Delegations  here  present  agree  to  recommend  to 
their  respective  governments  that,  by  the  free  coinage  of 
silver  at  a  relation  to  be  agreed  upon,  or  provisionally, 
through  extended  coinage  upon  government  account  and 
the  accumulation  of  silver  bullion  in  public  treasuries,  they 
make  a  concerted  effort  to  restore  silver  to  its  function  as 
money  of  full  power." 

At  no  time  during  the  further  proceedings  did  the  in- 
terest of  our  mission  appear  to  require  the  presentation  of 
this  proposition. 

At  the  seventh  and  concluding  session,  on  the  29th  of 
August,  the  following  reply  to  the  propositions  submitted 
by  the  Delegates  of  the  United  States  was  offered  on  be- 
half of  the  majority  of  the  European  Delegates  : 

The  Delegates  of  the  European  States  represented  in 
Conference  wish  to  express  their  sincere  thanks  to  the 
Government  of  the  United  States  of  America  for  having 
procured  an  international  exchange  of  opinion  upon  a  sub- 
ject of  so  much  importance  as  the  monetary  question. 

Having  maturely  considered  the  proposals  of  the  rep- 
resentatives of  the  United  States,  they  recognize  : 

I. 

That  it  is  necessary  to  maintain  in  the  world  the  mone- 
tary functions  of  Silver  as  well  as  those  of  Gold,  but  that 
the  selection  for  use  of  one  or  the  other  of  the  two  metals, 
or  of  both,  simultaneously,  should  be  governed  by  the  spe- 
cial position  of  each  State,  or  group  of  States. 


THE    PROPOSALS    OF    THE    UNITED    STATES.          257 
II. 

That  the  question  of  the  restriction  of  the  Coinage  of 
Silver  should  equally  be  left  to  the  discretion  of  eacli 
State,  or  group  of  States,  according  to  the  particular  cir- 
cumstances in  which  they  may  find  themselves  placed, 
and  the  more  so,  in  that  the  disturbance  produced  during 
the  recent  years  in  the  Silver  market  has  variously  affected 
the  monetary  situation  of  the  several  countries. 

III. 

That  the  differences  of  opinion  which  have  appeared, 
and  the  fact  that  even  some  of  the  States  which  have  the 
Double  Standard  find  it  impossible  to  enter  into  a  mutual 
engagement  with  regard  to  the  free  coinage  of  Silver,  ex- 
clude the  discussion  of  the  adoption  of  a  common  ratio 
between  the  two  metals. 

Contemporaneously  with  the  presentation  of  this  paper, 
individual  expressions  of  opinion  were  offered  by  several 
of  the  Delegations,  which  may  be  seen  in  the  journal  ac- 
companying this  report. 

To  this  declaration  of  the  European  Delegates,  the 
Delegates  of  the  United  States  rejoined  with  the  following 
statement  of  their  views,  with  which  the  formal  proceed- 
ings of  the  Conference  terminated  : 

In  response  to  the  address  of  the  representatives  of  the 
European  States,  the  representatives  of  the  United  States 
desire,  on  their  part,  to  express  their  thanks  to  the 
European  States  for  accepting  their  invitation  and  con- 
sulting with  them  upon  a  subject  of  so  much  importance. 

The  representatives  of  the  United  States  regret  that 
they  cannot  entirely  concur  in  all  that  has  been  submitted 


258  APPENDIX. 

to  them  by  a  majority  of  the  representatives  of  the  Eu- 
ropean States. 

They  fully  concur  in  a  part  of  the  first  proposition,  viz., 
that  "  It  is  necessary  to  maintain  in  the  world  the  mone- 
tary functions  of  silver  as  well  as  those  of  Gold,"  and 
they  desire  that  ere  long  there  may  be  adequate  co-opera- 
tion to  obtain  that  result. 

Thev  cannot  object  to  the  statement  that  "  the  selection 
for  use  of  one  or  other  of  these  two  metals,  or  of  both 
simultaneously,  should  be  governed  by  the  special  posi- 
tion of  each  State  ; "  but  if  it  be  necessary  to  maintain  the 
monetary  functions  of  the  two  metals  as  previously  de- 
clared, they  respectfully  submit  that  special  positions  of 
States  may  become  of  secondary  importance. 

From  so  much  of  the  second  proposition  as  assigns  as  a 
special  reason  for  at  present  restricting  the  Coinage  of 
Silver  "  that  the  disturbance  produced  during  the  recent 
years  in  the  silver  market  has  differently  affected  the 
monetary  situation  of  the  several  countries,"  they  respect- 
fully dissent,  believing  that  a  policy  of  action  would  re- 
move the  disturbance  that  produced  these  inequalities. 

In  regard  to  the  third  and  last  proposition,  they  admit 
that  "  some  of  the  States  which  have  the  Double  Stand- 
ard," or,  as  they  prefer  to  say,  use  both  metals,  "find 
it  impossible  to  enter  into  a  mutual  engagement  for  the 
free  Coinage  of  Silver." 

They  as  representatives  of  the  United  States,  have  come 
here  expressly  to  enter  into  such  an  engagement.  The 
difficulty  is  not  with  them,  and,  wherever  it  may  be,  they 
trust  it  may  be  soon  removed.  They  entirely  concur  in 
the  conclusion  drawn  from  this  state  of  the  case  that  it 
"  excludes  the  discussion  of  the  adoption  of  a  common 


THE    CONFERENCE    OF    1881.  259 

ratio  between  the  two  metals  "  if  the  nations  are  not  ready 
to  adopt  a  policy  to  uphold  it.  We  remain  upon  ours  ; 
the  European  States  upon  theirs. 

R.  E.  FENTON. 

W.  S.  GROESBECK. 

FRANCIS  A.  WALKER. 

S.  DANA  HORTON. 


V. 
THE  CONFERENCE  OF  1881. 

DECLARATIONS  OF  FRANCE  AND  THE  UNITED  STATES. 

Mr.  EVARTS,  on  behalf  of  the  Delegates  of  France 
(Magnin,  Dumas,  De  Normandie,  and  Cernuschi),  and  of 
the  United  States  of  America  (Evarts,  Thurman,  Howe, 
and  Horton),  read  the  following  Declaration  : 

The  Delegates  of  France  and  of  the  United  States,  in 
the  name  of  their  respective  Governments,  make  the  fol- 
lowing Declarations  : 

1.  The  depreciation  and  great  fluctuations  in  the  value 
of  silver  relatively  to  gold,  which  of  late  years  have  shown 
themselves,  and  which  continue  to  exist,  have  been,  and 
are,  injurious  to  commerce  and  to  the  general  prosperity, 
and  the  establishment  and  maintenance  of  a  fixed  relation 
of  value  between  silver  and  gold  would  produce  most  im- 
portant benefits  to  the  commerce  of  the  world. 

2.  A  convention  entered  into  by  an  important  group  of 
States,  by  which  they  should  agree  to  open  their  mints  to 
free  and  unlimited  coinage  of  both  silver   and  gold,  at  a 
fixed  proportion  of  weight  between  the  gold  and  silver 

From  the  Document  of  the  Conference,  page  502. 


260  APPENDIX. 

contained  in  the  monetary  unit  of  each  metal,  and  with 
full  legal  tender  faculty  to  the  money  thus  issued,  would 
cause  and  maintain  a  stability  in  the  relative  value  of  the 
two  metals  suitable  to  the  interests  and  requirements  of 
the  commerce  of  the  world. 

3.  Any  ratio,  now  or  of  late  in  use  by  any  commercial 
nation,  if  adopted   by   such   important    group  of  States, 
could  be  maintained ;  but  the  adoption  of  the  ratio  of  15£ 
to  1,  would  accomplish  the  principal  object  with  less  dis- 
turbance in  the  monetary  systems  to  be  affected  by  it  than 
by  any  other  ratio. 

4.  Without  considering  the  effect  which  might  be  pro- 
duced toward  the  desired  object  by  a  lesser  combination 
of  States,  a    convention  which    would   include    England, 
France,  Germany,  and  the   United  States,  with   the  con- 
currence of   other   States,  both   in    Europe    and    on  the 
American  continent,  which  this  combination  would  assure, 
would  be  adequate  to  produce  and  maintain  throughout 
the  commercial  world  the  relation  between  the  two  metals 
that  such  convention  should  adopt. 

KESOLUTION  FOR  ADJOURNED  MEETING  IN  1882. 

The  Conference,  considering  that  in  the  course  of  its 
two  sessions  it  has  heard  the  speeches,  declarations  and 
observations  of  the  delegates  of  the  States  hereinafter 
enumerated  ; 

Germany,  Austria-Hungary,  Belgium,  Denmark,  Spain, 
The  United  States,  France,  Great  Britain,  British  India, 
Canada,  Greece,  Italy,  The  Netherlands,  Portugal,  Bussia, 
Sweden,  Norway,  and  Switzerland ; 

Considering  that  the  declarations  made  by  several  of 
the  delegates  have  been  in  the  name  of  their  governments; 

That  these    declarations  all    admit   the    expediency  of 


THE    PROPOSED    CONFERENCE    OF    1883.  261 

taking  various  measures  in  concert,  under  reservation  of 
the  entire  freedom  of  action  of  the  different  governments  ; 

That  there  is  ground  for  believing  that  an  understand- 
ing may  be  established  between  the  States  which  have 
taken  part  in  the  Conference ; 

But  that  it  is  expedient  to  suspend  its  meetings ; 

That,  in  fact,  the  monetary  situation  may,  as  regards 
some  States,  call  for  the  intervention  of  their  governments, 
and  that  there  is  reason  for  giving  an  opportunity  at 
present  for  diplomatic  negotiations ; 

Adjourns  to  Wednesday,  12th  April,  1882. 


YI. 
THE  PROPOSED  CONFERENCE  OF  1882. 

COPY  OF  AN  IDENTICAL  NOTE  SENT  TO  THE  VARIOUS  POWERS 
BY  THE  GOVERNMENTS  OF  FRANCE  AND  OF  THE  UNITED 
STATES,  MARCH  31,  1882. 

PARIS,  March  31,  1882. 

The  International  Monetary  Conference  which  was  con- 
vened at  Paris  last  year,  upon  the  invitation  of  France 
and  of  the  United  States,  and  in  which  the  Government 
of  was  represented,  adjourned  to  meet 

the  12th  of  April,  1882. 

In  making  this  decision  at  the  session  of  July  8,  1881, 
the  Delegates  anticipated  that,  before  the  date  thus  fixed, 
the  Governments  represented  in  the  Conference  would  be 
able  to  prepare  solutions  of  the  questions  involved,  with 
a  view  to  the  conclusion  of  an  international  convention, 
the  terms  of  which  should  be  discussed  and  determined 
by  the  Conference. 


262  APPENDIX. 

This  anticipation  lias  been,  in  part,  realized.  From  all 
the  information  which  has  been  received,  it  appears  that 
in  a  large  number  of  States  the  question  has  continued  to 
be  the  subject  of  earnest  consideration  and  that  various 
plans  have  been  under  discussion,  with  the  object  either 
of  re-establishing  the  free  coinage  of  silver  money,  or  of 
restoring  to  the  metal  silver  its  proper  international  value 
by  enlarging  its  use  as  coin.  Up  to  the  present  time, 
however,  these  investigations  do  not  appear  to  have  pro- 
duced conclusions  sufficiently  positive  to  serve  as  a  basis 
for  formal  deliberations  of  the  Conference. 

Hence,  in  the  opinion  of  the  Government  of  the  United 
States,  in  conformity  with  the  view  entertained  by  various 
other  Governments,  notably  by  those  of  Germany,  Hol- 
land, and  Italy,  there  would  be  no  sufficient  advantage  in 
reopening  the  discussions  of  the  Conference  at  present. 

In  this  situation,  the  Governments  of  the  United  States 
and  of  France  are  of  the  opinion  that  it  would  be  desirable 
to  defer  the  convocation  of  the  Conference,  subject  to  a  de- 
termination, on  the  part  of  the  States  interested,  of  the  date 
for  its  reassembling,  the  same  to  take  place  within  the  pres- 
ent year. 


VII. 

FOBEIGN   COINS  AS  LEGAL   TENDEE  AND  THE 
POLICY  OF  UNION. 

In  all  cases  where  communities  which  have  maintained 
independent  Coinage  Systems  have  come  into  union  with 
each  other,  or  into  subjection  one  to  another,  a  conflict  of 
coinages  must  naturally  ensue,  and  the  settlement  of  such 
conflict  must  naturally  offer  analogies  both  with  the  jarring 
of  the  money  systems  of  independent  nations  and  with  that 
monetary  pacification  which  is  the  aim  of  international 
contract. 

For  instance,  the  monetary  arrangements  arising  out  of 
the  consolidation  of  the  Eoman  Empire,  or,  later,  out  of 
that  of  the  royal  power  of  France,  and  that  of  the  United 
Kingdom  of  Great  Britain,  must  offer  such  analogies,  while 
the  partial  and  desultory  coinage  legislation  of  the  Holy 
Boman  Empire  of  the  German  Nation  in  past  centuries, 
and  in  its  turn  the  speedy  monetary  unification  of  the  new 
German  Empire  of  to-day,  would  offer  similar  points  of 
resemblance  and  of  instruction. 

In  the  Document  of  the  Monetary  Conference  of  1878 
is  given  a  list  of  Coinage  Treaties,  the  result  of  researches 
which  enabled  me  effectively  to  characterize  the  policy  I 
had  so  long  sought  to  promote. 

The  possible  future  monetary  treaty  of  the  chief  Western 
Powers,  contemplated  by  the  advocates  of  the  policy 
adopted  by  the  United  States  in  the  law  of  February  28, 
1878,  under  which  the  Conference  was  convoked,  differs 

NOTE. — From  the  Document  of  the  Monetary  Conference  of  1878. 

263 


264  APPENDIX. 

in  an  essential  point  from  treaties  of  which  history  offers 
an  example.  Such  treaties  have,  it  is  believed,  invariably 
had  for  their  object  a  Fusion  of  Currencies  or  Mutuality 
of  Legal  Tender ;  the  coins  struck  in  one  country  were  to 
receive  legal  currency  in  another ;  and  this  interchange- 
ability  of  coins  was  the  main  object  of  the  treaty. 

This  general  object  may  have  implied  the  purpose,  or 
carried  with  it  the  result,  that  a  certain  metal  or  certain 
metals  should  become  or  remain  material  of  coinage  in  the 
contracting  countries,  and  may  have  included  the  obliga- 
tion of  each  party  to  maintain  by  appropriate  laws  the 
legal-tender  character  of  such  coined  metal. 

But  it  was  the  coining  and  not  the  metal :  it  was  the 
subdivision  and  the  stamping  of  the  material,  and  not  the 
material  itself,  that  offered  the  motive  of  the  contract. 
Indeed,  until  the  middle  of  this  century,  it  appears  to  have 
been  taken  for  granted — perhaps  unconsciously,  but  in  any 
case  by  general  consent — that  the  two  metals  would  remain 
Money ;  that  they  would  retain  an  international  currency 
as  material  for  Money  sufficient  to  guarantee  their  general 
status.  Gold  might  be  excluded  here  from  formal  rights 
of  legal  tender,  and  there  silver  might  seem  ostracised, 
but  there  was  no  combined  effort  to  exclude  silver,  and  the 
nations  which  would  not  admit  gold  as  compulsory  legal 
tender  furthered  its  use  as  a  trade  coin. 

With  the  outlawry  of  silver  in  Europe  comes  a  new  order 
of  events,  and  to  that  new  order  of  events  the  proposed 
amendments  of  law  were  adapted.  The  advocates  of  the 
policy  adopted  by  Congress  dealt  with  the  material,  not 
with  the  stamping  of  its  subdivisions. 

The  object  of  this  policy  would  be  fully  met  by  a  treaty 
which  should  merely  guarantee  the  equality  of  the  metals 
before  the  law.  Under  such  a  treaty  the  contracting 


FOREIGN    COINS    AS    LEGAL    TENDER.  265 

parties  might  each  retain  undisturbed  their  national  coins  ; 
their  mutual  engagement  would  relate  merely  to  the  use  of 
the  two  metals  as  full  legal-tender  at  the  same  ratio. 
This  implies  that  in  making  such  coins,  uniform  freedom 
should  be  granted  to  the  private  individual  to  have  such 
metal  coined  ;  and  that  the  same  charge,  or  absence  of 
charge,  for  mintage,  should  obtain  in  the  contracting  na- 
tions ;  and  that  at  the  same  time  full  legal-tender  power 
should  be  appropriately  secured  by  each  contracting 
country  to  its  own  coins  thus  struck. 

An  examination  of  the  history  of  Coinage  Confedera- 
tions, will  reveal  that  their  disadvantages  or  deficiencies 
arose  either,  1st,  from  this  extra-national  legal  currency 
of  coins,  which  was  their  primary  object ;  or,  2d  (when 
they  contemplated  the  concurrent  use  of  the  two  metals), 
from  an  extra-federal  demand  for  gold  at  a  silver  price 
higher  than  that  assigned  to  the  metal  in  the  federal  Coin- 
age System. 

These  disadvantages  which  inhered  in  all  European 
Monetary  Unions  actually  formed  are  believed  to  be  ex- 
cluded from  that  which  the  United  States  has  proposed 
to  the  nations  for  discussion.  It  i&  not  essential,  nor  is 
it  an  important  practical  object  of  this  policy  that  extra- 
national  legal  currency  of  coins  should  be  included  in  the 
contract ;  while  the  union  contemplated  is  so  large  that,  so 
far  as  probabilities  can  be  calculated,  its  tranquillity  could 
not,  under  any  circumstances  which  this  generation  is  war- 
ranted in  anticipating,  be  disturbed  by  an  extra-federal 
demand  for  gold. 


VIII. 

THE    ROYAL  COMMISSION    ON  GOLD    AND  SIL- 
VER, 1886-1888. 

EXTRACTS  FROM  THE  FINAL  REPORT,  Nov.  6,  1888. 

PAKT  I.  Signed  by  all  the  members  of  the  Commission. — Lord  HERSCHELL, 
Sir  JOHN  LUBBOCK,  Bart.,  M.  P.  ;  Mr.  J.  W.  BIRCH,  Hon.  C.  W.  FREE- 
MANTLE,  C.  B.  ;  Sir  T.  H.  FAEREE,  Bart. ;  Kt.  Hon.  LEONAED  H.  COURT- 
NEY, M.  P. ;  Rt,  Hon.  Sir  Louis  MALLET,  C.  B.  ;  Rt.  Hou.  A.  J.  BAL- 
FOUE,  M.  P. ;  Rt.  Hon.  HENRY  CHAPLIN,  M.  P.  ;  Sir  D.  BALFOUE,  K.  C. 
S.  I. ;  Sir  W.  H.  HOULDSWOETH,  Bart.,  M.  P.  ;  Mr.  SAMUEL  MONTAGU, 
M.  P. 

SEC.  186.  "  It  must  be  borne  in  mind  that  in  the  case  of 
other  commodities  the  effect  of  changes  in  the  supply  and 
demand  is  both  more  marked  and  more  immediate.  These 
commodities  are  generally  produced  for  the  purpose  of 
consumption  at  an  early  date  or  within  a  comparatively 
short  period.  The  supply  at  any  time  available  for  the 
market,  or  capable  of  being  placed  on  it  at  short  notice,  is 
therefore  a  very  important  element  in  the  process  by  which 
its  value  is  fixed. 

"  The  precious  metals  on  the  other  hand  are  but  to  a 
slight  extent  consumed,  and  the  available  supply  consists 
of  the  accumulations  of  previous  years. 

"It  follows,  therefore,  that  in  their  case  a  diminution  or 
an  increase  in  the  new  supply  is  of  less  importance  than 
in  the  case  of  consumable  articles,  and  that  an  increase  or 
diminution  in  demand  has  also  a  smaller  effect.  The  im- 
portant consideration  with  regard  to  them  at  any  one 


NOTE. — From  a  circular  of  the  Bimetallic  League. 

266 


moment  is  rather  the  relation  between  the  total  stock  then 
in  existence  and  the  then  existing  demands  upon  it." 

SEC.  189.  "Looking,  then,  to  the  vast  changes  which 
occurred  prior  to  1873  in  the  relative  production  of  the 
two  metals  without  any  corresponding  disturbance  in  their 
market  value,  it  appears  to  us  difficult  to  resist  the  con- 
clusion that  some  influence  was  then  at  work  tending  to 
steady  the  price  of  silver,  and  to  keep  the  ratio  which  it 
bore  to  gold  approximately  stable." 

SEC.  190.  "Prior  to  1873  the  fluctuations  in  the  price  of 
silver  were  gradual  in  their  character,  and  ranged  within 
very  narrow  limits.  The  maximum  variation  in  1872  was 
fd.,  and  the  average  not  quite  T5g-d.,  while  in  1886  the 
maximum  was  2T9^d.,  and  the  average  nearly  IJd.  It  has 
not  been,  and  indeed  hardly  could  be,  suggested  that  this 
difference  can  be  accounted  for  by  changes  in  the  relative 
production  or  actual  use  of  the  two  metals." 

SEC.  191.  "The  explanation  commonly  offered  of  these 
constant  variations  in  the  silver  market  is  that  the  rise  or 
depression  of  the  price  of  silver  depends  upon  the  brisk- 
ness or  slackness  of  the  demand  for  the  purpose  of  remit- 
tance to  silver-using  countries,  and  that  the  price  is  largely 
affected  by  the  amount  of  the  bills  sold  from  time  to  time 
by  the  Secretary  of  State  for  India  in  Council. 

"  But  these  causes  were,  as  far  as  can  be  seen,  operat- 
ing prior  to  1873,  as  Avell  as  subsequent  to  that  date,  and 
yet  the  silver  market  did  not  display  the  sensitiveness  to 
these  influences  from  day  to  day  and  month  to  month  which 
it  now  does." 

SEC.  192.  "These  considerations  seem  to  suggest  the  ex- 
istence of  some  steadying  influence  in  former  periods, 
which  has  now  been  removed,  and  which  has  left  the  sil- 
ver market  subject  to  the  free  influence  of  causes,  the  full 


268  APPENDIX. 

effect  of  which  was  previously  kept  in  check.  The  ques- 
tion, therefore,  forces  itself  upon  us : — Is  there  any  other 
circumstance  calculated  to  affect  the  relation  of  silver  to 
gold  which  distinguishes  the  latter  period  from  the  earlier  ? 

"Now  undoubtedly,  the  date  which  forms  the  dividing- 
line  between  an  epoch  of  approximate  fixity  in  the  relative 
value  of  gold  and  silver  and  one  of  marked  instability,  is 
the  year  when  the  bimetallic  system  which  had  previously 
been  in  force  in  the  Latin  Union  ceased  to  be  in  full  opera- 
tion ;  and  we  are  irresistibly  led  to  the  conclusion  that  the 
operation  of  that  system,  established  as  it  was  in  countries 
the  population  and  commerce  of  which  were  considerable, 
exerted  a  material  influence  upon  the  relative  value  of  the 
two  metals. 

"So  long  as  that  system  was  in  force  we  think  that, 
notwithstanding  the  changes  in  the  production  and  use  of 
the  precious  metals,  it  kept  the  market  price  of  silver  ap- 
proximately steady  at  the  ratio  fixed  by  law  between 
them,  namely  15^  to  1. 

SEC.  193.  "Nor  does  it  appear  to  .MB  a  priori  unrea- 
sonable to  suppose  that  the  existence  in  the  Latin  Union 
of  a  bimetallic  system  with  a  ratio  of  15 £  to  1  fixed  be- 
tween the  two  metals  should  have  been  capable  of  keeping 
the  market  price  of  silver  steady  at  approximately  that 
ratio. 

"  The  view  that  it  could  only  affect  the  market  price  to 
the  extent  to  which  there  was  a  demand  for  it  for  currency 
purposes  in  the  Latin  Union,  or  to  which  it  was  actually 
taken  to  the  mints  of  those  countries  is,  we  think,  falla- 
cious. 

"  The  fact  that  the  owner  of  silver  could,  in  the  last 
resort,  take  it  to  those  mints  and  have  it  converted  into 
coin  which  would  purchase  commodities  at  the  ratio  of 


ROYAL    COMMISSION    ON   GOLD    AND    SILVER.        269 

of  silver  to  one  of  gold,  would,  in  our  opinion,  be 
likely  to  affect  the  price  of  silver  in  the  market  generally, 
whoever  the  purchaser  and  for  whatever  country  it  was 
destined.  It  would  enable  the  seller  to  stand  out  for  a 
price  approximating  to  the  legal  coin  and  would  tend  to 
keep  the  market  steady  at  about  that  point." 

PART  II.  Signed  by  six  members  of  the  Commission. — Lord  HERSCHELL, 
Sir  JOHN  LUBBOCK,  Bart.,  M.  P.;  Mr.  J.  W.  BIRCH,  Hon.  C.  W.  FREE- 
MANTLE,  C.  B.;  Sir  T.  H.  FARRER,  Bart.;  lit.  Hon.  LEONARD  H.  COURT- 
NEY, M.  P. 

SEC.  9.  "  However  much  opinions  may  differ  as  to  the 
extent  of  the  evil  arising  from  the  increased  difficulty  which 
a  fluctuating  exchange  interposes,  we  do  not  think  its  reality 
is  open  to  question." 

SEC.  101.  "  There  cannot  be  two  opinions  as  to  the  very 
serious  effect  which  the  continued  fall  in  the  gold  price  of 
silver  has  had  on  the  finances  of  the  Government  of  India." 

SEC.  102.  "  We  are  fully  impressed  with  a  sense  of  the 
difficulties  which  surround  the  Indian  Government,  and  of 
the  serious  questions  to  which  any  proposed  additional  tax 
must  give  rise.  It  is  not  only  the  embarrassment  which 
has  already  been  caused  to  the  Government  of  India  that 
has  to  be  borne  in  mind,  but  the  impossibility  of  foresee- 
ing to  what  extent  those  embarrassments  may  be  increased, 
and  their  difficulty  augmented,  by  a  further  depression  in 
the  value  of  silver." 

SEC.  107.  "We  think  that  in  any  conditions  fairly  to  be 
contemplated  in  the  future,  so  far  as  we  can  forecast  them 
from  the  experience  of  the  past,  a  stable  ratio  might  be 
maintained  if  the  nations  we  have  alluded  to*  were  to  ac- 

*The  United  Kingdom,  Germany,  the  United  States,  and  the  Latin 
Union. 


270  APPENDIX. 

cept  and  strictly  adhere  to  bimetallism,  at  the  suggested 
ratio.  We  think  that  if  in  all  these  countries  gold  and 
silver  could  be  freely  coined,  and  thus  become  exchange- 
able against  commodities  at  the  fixed  ratio,  the  market 
value  of  silver  as  measured  by  gold  would  conform  to  that 
ratio,  and  not  vary  to  any  material  extent." 

SEC.  119.  "Apprehensions  have  been  expressed  that  if 
a  bimetallic  system  were  adopted  gold  would  gradually 
disappear  from  circulation.  If,  however,  the  arrangement 
included  all  the  principal  commercial  nations,  we  do  not 
think  there  would  be  any  serious  danger  of  such  a  result. 

"Such  a  danger,  if  it  existed  at  all,  must  be  remote.  It 
is  said  indeed,  by  some,  that  if  it  were  to  happen,  and  all 
nations  were  to  be  driven  to  a  system  of  silver  monomet- 
allism, the  result  might  be  regarded  without  dissatisfac- 
tion. 

"We  are  not  prepared  to  go  this  length,  but  at  the  same 
time  we  are  fully  sensible  of  the  benefits  which  would  ac- 
crue from  the  adoption  of  a  common  monetary  standard 
by  all  the  commercial  nations  of  the  world,  and  we  are 
quite  alive  to  the  advantage  of  the  adoption  by  these  na- 
tions of  an  uniform  bimetallic  standard  as  a  step  in  that 
direction." 


PART  III.  Signed  by  the  other  six  members  of  the  Commission.— Ut.  Hon. 
Sir  Louis  MALLET,  C.  B.;  Bt.  Hon.  A.  J.  BALFOUR,  M.  P. ;  Et.  Hon. 
HENBY  CHAPLIN,  M.  P.  ;  Sir  D.  BARBOUR,  K.  C.  S.  I. ;  Sir  W.  H.  HOULDS- 
WORTH,  Bart.,  M.  P. ;  Mr.  SAMUEL  MONTAGU,  M.  P. 

SEC.  28.  "We  think  that  the  above  remarks  upon  the 
evils  affecting  both  the  United  Kingdom  and  India,  if  taken 
in  connection  with  the  more  detailed  statement  in  Part  I 
of  the  Report,  will  sufficiently  indicate  our  view  as  to  their 
nature  and  gravity  ;  and  that  they  are  largely  due  to  the 


ROYAL    COMMISSION    ON    GOLD    AND    SILVER.        271 

currency  changes  which  have  taken  place  in  the  years  im- 
mediately preceding  and  following  1873. 

"We  think  that  too  much  stress  cannot  be  laid  upon 
the  novelty  of  the  experiment  which  has  been  attempted 
as  the  result  of  the  above  changes.  That  experiment 
consists  in  the  independent  and  unregulated  use  of  both 
gold  and  silver  as  standards  of  value  by  the  different  na- 
tions of  the  world. 

"  We  are  strongly  of  opinion  that  both  Metals  must  con- 
tinue to  be  used  as  standard  money  ;  the  results  of  using 
them  separately  and  independently  since  1873  have  been 
most  unsatisfactory,  and  may  be  positively  disastrous  in 
the  future. 

"  It  cannot  be  questioned  that  until  1873  gold  and  silver 
were  always  effectively  linked  by  a  legal  ratio  in  one  or 
more  countries. 

"  It  is  equally  indisputable  that  the  relative  value  of  the 
two  metals  has  been  subject  to  greater  divergence  since 
1874  than  during  the  whole  of  the  200  years  preceding 
that  date,  notwithstanding  the  occurrence  of  variations  in 
their  relative  production  more  intense  and  more  prolonged 
than  those  which  have  been  experienced  in  recent  years." 

SEC.  29.  "  In  1873-74  the  connecting  link  disappeared, 
and  for  the  first  time  the  system  of  rating  the  two  metals 
ceased  to  form  a  subject  of  legislation  in  any  country  in  the 
world. 

"  The  law  of  supply  and  demand  was  for  the  first  time 
left  to  operate  independently  upon  the  value  of  each  metal ; 
and  simultaneously  the  ratio  which  had  been  maintained, 
with  scarcely  any  perceptible  variation,  for  200  years, 
gave  place  to  a  marked  and  rapid  divergence  in  the  rela- 
ative  value  of  gold  and  silver,  which  has  culminated  in  a 
change  from  15^  to  1  to  22  to  1." 


272  APPENDIX. 

Proposed  Remedy. 

SEC.  30.  "  It  appears  to  us  impossible  to  attribute  the 
concurrence  of  these  two  events  to  a  merely  fortuitous 
coincidence.  They  must,  in  our  opinion,  be  regarded  as 
standing  to  each  other  in  the  relation  of  cause  and  effect. 

"  We  cannot,  therefore,  doubt  that  if  the  system  which 
prevailed  before  1873  were  replaced  in  its  integrity,  most 
of  the  evils  which  we  have  above  described  would  be  re- 
moved ;  and  the  remedy  which  we  have  to  suggest  is  sim- 
ply the  reversion  to  a  system  which  existed  before  the 
changes  above  referred  to  were  brought  about ;  a  system, 
namely,  under  which  both  metals  were  freely  coined  into 
legal  tender  money  at  a  fixed  ratio  over  a  sufficiently 
large  area. 

"  The  effects  of  that  system,  though  it  was  nominally  in 
force  only  within  a  limited  area,  were  felt  in  all  commer- 
cial countries,  whatever  their  individual  systems  of  cur- 
rency might  be  ;  and  the  relative  value  of  the  two  metals 
in  all  the  markets  of  the  world  was  practically  identical 
with  that  fixed  by  the  legislation  of  the  countries  forming 
the  Latin  Union. 

"As  regards  the  possibility  of  maintaining  such  a  sys- 
tem in  the  future,  we  need  only  refer  to  the  conclusion  at 
which  our  colleagues  have  arrived  in  Sec.  107,  Part  II. 
(see  above),  and  with  which  we  entirely  agree." 

SEC.  34.  "  No  settlement  of  the  difficulty  is,  however,  in 
our  opinion,  possible  without  international  action. 

"  The  remedy  which  we  suggest  is  essentially  interna- 
tional in  its  character,  and  its  details  must  be  settled  in 
concert  with  the  other  Powers  concerned. 

"  It  will  be  sufficient  for  us  to  indicate  the  essential  feat- 
ures of  the  agreement  to  be  arrived  at,  namely — 


ROYAL    COMMISSION    ON    GOLD    AND    SILVER.        273 

(1)  Free    coinage  of   both    metals   into   legal-tender 
money  ;  and 

(2)  The  fixing  of  a  ratio  at  which  the  coins  of  either 
metal  shall  be  available  for  the  payment  of  all  debts 
at  the  option  of  the  debtor." 

SEC.  35.  "  The  particular  ratio  to  be  adopted  is  not,  in 
our  opinion,  a  necessary  preliminary  to  the  opening  of 
negotiations  for  the  establishment  of  such  an  agreement, 
and  can,  with  other  matters  of  detail,  be  left  for  further 
discussion  and  settlement  between  the  parties  interested. 

"  We,  therefore,  submit  that  the  chief  commercial  na- 
tions of  the  world,  such  as  the  United  States,  Germany, 
and  the  States  forming  the  Latin  Union,  should  in  the  first 
place  be  consulted  as  to  their  readiness  to  join  with  the 
United  Kingdom  in  a  conference,  at  which  India  and  any 
of  the  British  Colonies  which  may  desire  to  attend  should 
be  represented,  with  a  view  to  arrive,  if  possible,  at  a  com- 
mon agreement  on  the  basis  above  indicated." 

SEC.  36.  "  We  have  indicated  what  appears  to  us  to  be 
the  only  permanent  solution  of  the  difficulties  arising  from 
the  recent  changes  in  the  relative  value  of  the  precious 
metals,  and  the  only  solution  which  will  protect  this  and 
other  countries  against  the  risks  of  the  future." 

Certain  remedial  suggestions  of  t/ie  authors  of  Part  11 
are  reprinted  on  page  26. 


IX. 

THE   STRENGTH   OF    THE   ENGLISH    SILVER 
PARTY. 

The  gist  of  the  report  presented  in  Paris  lies  in  the 
following  : 

BIMETALLIC  LEAGUE. 

"  The  object  of  the  League  is  to  urge  upon  the  British 
Government  the  necessity  of  co-operating  with  other  lead- 
ing nations  for  the  establishment,  by  international  agree- 
ment, of  the  free  coinage  of  gold  and  silver  at  a  fixed 
ratio." 

President,  HENBY  H.  GIBBS. 
Chairman  of  General  Council,  H.  E.  GEENFELL. 

Vice  Presidents : 

The  list  of  nearly  200  Vice  Presidents  is  not  reprinted  here,  as  their 
names  will  be  found  among  the  prominent  names  in  the  Deputation  of 
May  30. 

Trustees  of  Guarantee  Fund,  HENKY  H.  GIBBS,  S.  SMITH,  M.P.,  ABBA- 
HAM  HAWOBTH,  KOBEBT  BABCLAY,  GILBEET  BEITH. 

Executive  Council: 

Chairman,  EOBEET  BABCLAY,  Manchester. 
John  A.  Beith,  Manchester.  F.  B.  Forbes,  London. 

Thomas  Bell,  Whickham  (Co.  Dur-       H.  T.  Gaddum,  Manchester. 

ham).  Kobert  Gladstone,  Liverpool. 

Et.  Hon.  Henry  Chaplin,  M.P.  C.  W.  Gray,  M.P. 

Henry  Coke,  Liverpool.  Edward  H.  Greg,  Manchester. 

Geo.  B.  Dewhurst,  Manchester.  H.  E.  Grenfell,  London. 

Geo.  Handasyde  Dick,  Glasgow.  J.  H.  Gwyther,  London. 

John  S.  Dods,  Manchester.  E.  A.  Hague,  Manchester. 

E.  L.  Everett,  Ipswich.  Frank  Hardcastle,  M.P.,  Bolton. 

Frederick  J.  Faraday,  Manchester.       Ralph  Heaton,  Birmingham. 
J.  C.  Fielden,  Manchester.  John  Holliday,  Manchester. 


274 


BIMETALLIC    LEAGUE. 


275 


Sir    W.    H.    Houldsworth,    Bart., 

M.P. 

Isaac  Hoyle,  M.P.,  Manchester. 
Henry  Lathbury,  Manchester. 
Samson  S.  Lloyd,  London. 
Capt.  F.  C.  Loder-Symonds,  Far- 

ingdon. 

Charles  Macdonald,  Manchester. 
SirH.  M.  Meysey-Thompson,  Bart. 
Samuel  Montagu,  M.P.,  London. 
John  Muir,  Glasgow. 
Samuel  Ogden,  Manchester. 

Hon.  Treasurer,  ABRAHAM 


James  Parlane,  Manchester. 

A.  D.  Provand,  M.P.,  Manchester. 

J.  F.  S.  Kolleston,  Leicester. 

Edward  Sassoon,  London. 

I.  Seligman,  London. 

T.  H.  Sidebottom,  M.P.,  Manches- 
ter. 

T.  C.  Taylor,  Batley. 

John  Thomson,  Manchester. 

William  Westgarth,  London. 

Thomas  Willson,  Ryde,  Isle  of 
Wight. 

HAWORTH,  Manchester. 


Bankers:  BANK  OF  ENGLAND,  Manchester;  CHARTERED  BANK  or  INDIA, 

AUSTRALIA,  AND  CHINA,  Hatton  Court,  London,  E.  C. 
Secretary,  HENRY  MCNEIL,  F.S.S.,  Haworth's  Buildings;  5  Cross  street, 

Manchester. 

Central  Agricultural  Committee:  Offices,  2  Princes  street.  Great  George 
street,  Westminster,  S.  W. ;  Hon.  Sees. ,  RICHARD  DAWSON  and  A.  WES- 
TON  JARVIS,  M.P. 

Hon.  Secretaries: 


London,  Carl  Von  Buch,  M.A.,  11 
Queen  Victoria  street,  E.  C. 

Glasgow,  Wm.  Ewing,  7  Royal 
Bank  Place. 

Bradford,  J.  M.  McLaren,  Canal 
Road. 

Bolton,  Lewis  Haslam,  Ravens- 
wood. 

Blackburn,  JohnHargreaves,  High- 
er Bank. 

Batley,  T.  C.  Taylor,  Sunny  Bank. 

Ipswich,  R.  L.  Everett,  Rushmere. 

Brecon,  W.  S.  Miller,  Forest  Lodge. 

Chorley,  A.  C.  Smethurst,  Char- 
nock  House. 

Newcastle-on-Tyne    and     District 


(Industrial  Organizations),  J.  J. 
Harris,  83  Northbourne  street, 
Newcastle-oii-Tyne. 

Oxfordshire  and  Berkshire,  Cap- 
tain F.  C.  Loder-Symonds,  Hin- 
ton  Manor,  Faringdon,  Berks. 

Walsall,  W.  H.  Duignan. 

Southport,  S.  Hardmaii,  191  Lord 
street. 

Congleton,  A.  C.  Conder,  Bath  Vale 
Mill. 

Birmingham,  Frederick  Ash,  Snow 
Hill. 

Bristol,  J.  H.  Howell,  Castle  Green. 

Swansea,  Frederic  S.  Bishop,  Glan- 
rafon. 


THE  SILYEE  DEPUTATION 


THE  MAEQUIS  OF  SALISBURY,  KG., 

PRIME  MINISTER, 

AND    TO 

THE  EIGHT  HON.  G.  J.  GOSCHEN,  M.P, 

CHANCELLOR  OF  THE  EXCHEQUER, 
May  30,  1889. 

The  Eight  Hon.  HENKY  CHAPLIN,  M.P.,  introduced  the 


deputation. 

Duke  of  Richmond  and  Gordon, 

K.G. 

Duke  of  Portland. 
Duke  of  Manchester,  K.P. 
Duke  of  Abercorn. 
Marquis  of  Abergavenny,  K.G. 
Earl  of  Crawfor.d  and  Balcarres. 
Earl  of  Coventry. 
Earl  of  Radnor. 
Earl  of  Londesborough. 
Lord  Basing. 
Lord  Burton. 
Lord  Hindlip. 
Lord  Castletown. 
Rt.  Hon.  Sir  H.  J.  Selwyn  Ibbet- 

son,  Bart.,  M.P. 
Sir  John  Puleston,  M.P. 
J.  Addison,  Q.C.,  M.P. 
R.  G.  Webster,  M.P. 
G.  W.  Balfour,  M.P. 
Sir  Robert  Jardine,  Bart.,  M.P. 
W.  J.  Beadel,  M.P. 
G.  H.  Bond,  M.P. 
Samuel  Smith,  M.P. 
Isaac  Hoyle,  M.P. 
Col.    The   Hon.    F.    C.   Bridgman, 

M.P. 

G.  H.  Finch,  M.P. 
Sir    W.    H.    Houldsworth,    Bart., 

M.P. 

Sir  Rainald  Knightley,  Bart.,  M.P. 
Sir  E.  A.  H.  Lechmere,  Bart,,  M.P. 
Sir  Lewis  Pelly,  K.C.B.,  K. C.S.I., 

M.P. 


276 


Earl  of  Erne,  K.P. 

Earl  Stanhope. 

Earl  Maiivers. 

Earl  Amherst. 

Earl  of  Yarborough. 

Earl  Fortescue. 

Lord  Willoughby  de  Broke. 

Lord  Walsingham. 

Lord  Cheylesmore. 

Lord  Rowtou. 

S.  Williamson,  M.P. 

Lt.-Col.  Sandys,  M.P. 

T.  Milvain,  M.P. 

T.  Fieldeii,  M.P. 

J.  Corbett,  M.P. 

W.  Pomfret  Pomfret,  M.P. 

Leonard  Lyell,  M.P. 

Lord  Henry  Bruce,  M.P. 

Sir  R.  H.  Paget,  Bart.,  M.P. 

H.  Seton-Karr,  M.P. 

E.  P.  Mulhallen  Marum,  M.P. 

Samuel  Montagu,  M.P. 

Rt.  Hon.  E.  Heneage,  M.P. 

Frank  Hardcastle,  M.P. 

Win.  G.  Mount,  M.P. 

A.  Weston  Jarvis,  M.P. 

Hon.  J.  S.  Gathorne  Hardy,  M.P. 

W.  W.  B.  Beach,  M.P. 

Admiral  R.  C.  Mayne,  M.P. 

A.  D.  Provand,  M.P. 

Ed.  Hardcastle,  M.P. 

H.  H.  Howorth,  M.P. 

T.  Roe,  M.P. 

Marquis  of  Granby,  M.P 


THE    SILVER   DEPUTATION. 


277 


J.  W.  Maclure,  M.P. 
Sir  J.  E.  Dorington,  Bart.,  M.P. 
Col.  Saunderson,  M.P. 
J.  Kankin,  M.P. 
George  Howell,  M.P. 
C.  W.  Gray,  M.P.  (Chairman  Cen- 
tral Chamber  of  Agriculture). 
Major  Kasch,  M.P. 
J.  C.  Lawrance,  Q.C.,  M.P. 
A.  K.  Heath,  M.P. 
Colonel  Eyre,  C.B.,  M.P. 
Baron  Dimsdale,  M.P. 
J.  Bazley- White,  M.P. 
F.  S.  W.  Cornwallis,  M.P. 


Sir  Koper    Lethbridge.    K. C.S.I., 

M.P. 

Marquis  of  Carmarthen,  M.P. 
F.  Seager  Hunt,  M.P. 
H.  Knatchbull-Hugesseu,  M.P. 
Sir  E.  Birkbeck,  Bart,,  M.P. 
J.  Pinkertoii,  M.P. 
T.  H.  Sidebottom,  M.P. 
Hon.  G.  N.  Curzon,  M.P. 
M.  J.  Stewart,  M.P. 
W.  E.  M.  Tomlinson,  M.P. 
Col.  Cornwallis  West,  M.P. 
P.  A.  Muntz,  M.P. 
W.  Sidebottom,  M.P. 
T.  K.  Tapling,  M.P. 

DELEGATES  FKOM  CHAMBERS  OF  AGRICULTUEE. 
Banbury,  W.  J.  Warner.  Sir  F.  F.  Fowke,  Bart. 

Berks  and  Ox,  Wm.  G.  Mount,  M.       George  Stratton,  J.P. 

P.  (Chairman). 
Capt.  Loder  Symonds. 
J.  Thursby. 
Thos.  Wells. 
Geo.  Adams. 
Arthur  Harvey  Thursby. 
Bucks,  Baron  F.de  Rothschild,  M.P 
Viscount  Curzon,  M.P. 
Col.  Liebert  Goodall. 
Col.  R,  Purefoy  Fitzgerald. 
Hon.  Egerton  Hubbard,  M.P. 
W.  J.  Whitehouse  Griffin. 
W.  H.  Grenfell. 
Canterbury,  W.  Nethersole. 
Cirencester,  H.  J.  Marshall. 
Cowbridge,  J.  S.  Gibbon. 


Gloucestershire,  B.  St.  John  Ackers. 

J.  P.  Sargeaiit. 

W.  Priday. 

Hertfordshire,     Baron     Dimsdale, 

M.P. 

Kendal,  W.  H.  Wakefield. 
Leicestershire,  J.  F.  L.  Rollestone 

(President). 


Alderman  T.  Wright. 

Thomas  Nuttall. 

R.  F.  Martin,  J.P. 

H.  Clough  Taylor. 

W.  Thorpe. 

Lincolnshire,  Earl  of   Yarborough. 

A.  R.  Heath,  M.P. 

Col.  Eyre,  C.B.,  M.P. 

J.  C.  Lawrance,  M.P. 

J.  M.  Richardson. 

R.  H.  Ellis. 

Theodore  Trotter. 

Mai'Mone,  J.  Bazley-White,  M.P. 

F.  S.  W.  Cornwallis,  M.P. 

R.  A.  Hamilton  Seymour. 

Thomas  Powell. 

Capt.  J.  R.  Isherwood. 

Herbert  Ellis. 

Frank  Woodham. 

W.  S.  Forster. 

Monmouthshire,  Henry  Williams. 

Norfolk   H.  M.  Upcher. 

M.  P.  Squirrell. 

Notts,  W.  N.  Nicholson. 


278 


APPENDIX. 


Sevenoaks, W.H. Cronk  (Chairman). 

Shropshire,  W.  T.  Topham. 

Somersetshire,  G .  Troyte  Bullock. 

Suffolk  (East),  Koger  Kerrison. 

K.  L.  Everett. 

Rev.  J.  F.  A.  Hervey. 

A.  Harwood. 

Suffolk    (West),    Duncan     Parker 

(Chairman). 
Swindon.  Howard  Horsell. 


Tunbridge  Wells,  W.  Boper. 

Worcestershire,  T.  B.  Woodward 
(President). 

T.  H.  Crane. 

Yorkshire  (  West  Riding},  W.  Lips- 
comb  (President). 

Charles  Clay  (Vice-President). 

Percy  Tew,  J.P. 

George  Newton. 


CHAMBERS  OF  COMMERCE. 

Liverpool. — Henry  Coke  (of  David  Sassoon  &  Co.),  President  of  the 
Liverpool  Chamber  of  Commerce  and  Director  of  the  Mersey  Docks  and 
Harbor  Board.  Robert  Gladstone  (of  Ogilvy,  Gillanders  &  Co.,  Liver- 
pool, London,  Calcutta,  and  Rangoon),  Director  of  the  Liverpool  Cham- 
ber of  Commerce  and  Chairman  of  East  India  and  China  Trade  Section. 
Hugh  Lyle  Smyth  (of  Ross,  T.  Smyth  &  Co.,  Corn  Merchants). 

Birmingham.— P.  Albert  Muntz,  M.P.,  President  of  the  Birmingham 
Chamber  of  Commerce.  Henry  W.  Elliott  (of  Elliott's  Metal  Coy.,  Lt.), 
Chairman.  J.  William  Tonks  (of  T.  &  J.  Bragg,  Australian  and  Indian 
Trade),  Vice-Chairman.  Ralph  Heaton  (of  the  Mint),  Birmingham. 
Fredk.  Ash  (of  Sutton  &  Ash,  Iron  Merchants).  T.  B.  Chantrill  (of 
Chantrill  &  Co.,  Russian  Trade).  W.  Wyley  Lord  (of  J.  C.  &  W.  Lord, 
Indian  and  South  American  Trade).  Fredk.  Blood  (of  Fredk.  Blood 
&  Co.). 

Bolton. — Frank  Hardcastle,  M.P.  James  Booth,  J.P.,  Vice-President. 
Fredk.  W.  Briscoe,  Secretary. 

Xjeith. — R.  C.  Munro  Ferguson,  M.P.  (at  the  special  request  of  the 
Chamber). 

LABOR  ORGANIZATIONS. 


United    Textile    Factory    Workers'1 

Association. 
Northern   Counties'   Amalgamated 

Association  of  Weavers. 

Weavers'  Association,  Preston  .     . 

Blackburn  and  District  Power 
Loom  Weavers'  Association. 

Bury  Operative  Weavers'1  Associa- 
tion and  also  the  Bury  Trades 
Council. 


James  Mawdsley,  Chairman. 
Thomas  Birtwistle,  Gen.  Sec. 
David  Holmes,  President. 
W.  H.  Wilkinson,  Secretary. 
Joshua  Barrows,  Organizing  Sec. 
Luke  Park,  Secretary. 
A.  H.  Cottam,  President. 
George  Barker,  Secretary. 
Samuel  Hardman,  Secretary. 


THE    SILVER    DEPUTATION. 


279 


Amalgamated  Association  of  Oper- 
ative Cotton  Spinners. 

Do.  Bolton  Provincial 

Do.  Oldham  Provincial  . 


Oldham  Provincial  Card  and  Blow- 
ing Room  Operatives. 

Manchester    and    Salford 
Council. 


Wright  Wood. 

James  Kobinson. 

J.  T.  Fielding,  Secretary. 

E.  Mellor,  President. 

Tlios.  Ashton,  Secretary. 

George  Silk,  Secretary. 


Trades 


Newcastle    and    Oateshead    Trades 

Council. 
Bradford  Trades  Council. 

Wolverhampton  Trades  Council. 
Hyde  and  District  Trades  Council. 
Stalybridge  Trades  Council. 

Southport  Trades  Council    . 
Preston  Trades  Council  . 


M.  Arrandale,  President. 

C.  Scholes,  Treasurer. 

George  D.  Kelly,  Secretary. 

E.  Girling,  President. 

J.  J.  Harris,  Secretary. 

R.  Bower,  President. 

S.  Shaftoe,  Secretary. 

W.  F.  Mee,  Secretary. 

W.  Day. 

Samuel  Fildes,  President. 

W.  Bancroft,  Secretary. 

W.  H.  Carr,  President. 

S.  Sidebottom,  Secretary. 

W.  Morland. 

J.  Naylor,  President. 

T.  W.  Carlisle,  Secretary. 
GENERAL. 

Lord  Alwyn  Compton  ;  Lord  Algernon  Lennox  ;  Hon.  Algernon  Eger- 
ton;  Sir  Henry  Hoare,  Bart.;  Lt.-Gen.  R.  H.  Keatinge,  V.C.,  C.S.I.; 
Lt.-Gen.  Sir  Andrew  Clarke,  G.C.M.G.,  C.B.,  C.I.E.;  Sir  Leppel  H. 
Griffin,  K. C.S.I.;  Sir  Hector  M.  Hay;  Sir  Henry  Half  or  d,  Bart.;  Sir  T. 
C.  Hope,  K.C.S.I.,  C.I.E.  (late  Public  Works  Member  of  Viceroy's  Coun- 
cil in  India);  Sir  James  Allport;  Sir  G.  K.  Rickards,  K.C.B.;  Rt.  Hon. 
Sir  Louis  Mallet,  C.B.;  Sir  Rivers  Thompson,  K.C.S.I.  (late  Lt.-Gov. 
Bengal);  Sir  Seymore  Blane  ;  Sir  H.  Meysey-Thompson,  Bart.;  Sir  George 
Sitwell,  Bart.;  Sir  Edward  Sladen ;  Col.  Sir  W.  D.  Davies,  K.C.S.I.  (late 
Financial  Com.,  Punjab);  Hon.  Sydney  Greville;  Henry  H.  Gibbs;  H. 
R.  Grenfell;  Hon.  G.  Cuthbertson;  Professor  Foxwell,  M.A.;  Jacob 
Wilson;  H.  E.  Busted,  C.I.E.  (late  Assay  Master,  the  Mint,  Calcutta); 
J.  Burnaby  Atkins;  Rev  H.  F.  Burnaby ;  G.  Beaumont;  Major  Craigie 
(Sec.  Central  Chamber  of  Agriculture);  Moreton  Frewen;  E.  P.  Squarey 
(President  of  the  Institute  of  Surveyors):  E.  A.  Cazalet;  Col.  Morland 
Button ;  J.  H.  Jefferies ;  John  Musgrave  (Chairman  Whitehaven  Joint 
Stock  Bank,  Chairman  Whitehaven  Harbour  Trustees,  Chairman  Solway 
Junction  Rail  way),  Whitehaven;  J.  Henderson;  Capt.  Loder  Symonds  ; 
H.  Maule  ;  H.  J.  Marshall ;  Rev.  E.  Penwarne-Wellings  (Sinclairs);  H. 


280  APPENDIX. 

Frost ;  Agnew  Pope  (Proprietor  BriUxh  Trade  Journal};  W.  J.  Moore  ; 
Donald  Nicol,  Argyllshire ;  C.  D.  Field  (late  Judge  of  the  High  Court, 
India);  George  Hollings ;  Herbert  B.  Praed  (Banker,  189  Fleet  Street, 
E.G.);  W.  J.  Topham;  K.  H.  Pinhey ;  George  Stratton;  Major-General 
Trevor;  G.  S.  Sutherland;  W.  H.  Grenfell  (High  Sheriff  of  Bucks);  G. 
W.  Allen,  C.I.E.;  George  Cadell ;  S.  B.  L.  Druce ;  J.  Longworth ;  J.  D. 
Kees;  J.  D.  Ward;  Henry  Hoare ;  A.  P.  Sinnett;  Major-General  Sir  W. 
Moore;  A.  C.  Tupp  (Bengal  Civil  Service);  J.  H.  Manners  Sutton,  New- 
ark; Geo.  Handasyde  Dick  (of  Geo.  Handasyde  Dick  &  Co.,  Glasgow, 
Manchester,  and  Bombay);  Geo.  Bull,  Burton-on-Trent ;  Jas.  T.  Calvert, 
Sunderland  ;  Colonel  E.  Bond,  Chepstow  ?  Jas.  Hy.  Howell  (of  Llewellyn 
&  James),  Bristol ;  Edward  Langley,  Bath  ;  Ben.  Elmy  (of  Elmy  &  Co.), 
Congleton,  Cheshire  ;  W.  J.  Humfreys,  Hereford  ;  C.  M.  Hutton  Kiddell 
(of  Samuel  Smith  &  Co.,  Bankers),  Newark  ;  W.  H.  Duignan  (of  Duigiian 
&  Elliott,  Chairman  of  the  Cannock  Agricultural  Co.,  Limited),  Walsall: 
Ely  Andrew  (Chairman  of  J.  Andrew  &  Sons,  Limited),  Ashton-upon- 
Lyne  ;  Kichard  Dawson  (late  M.P.,  Leeds);  H.  Mallaby  Deeley,  Chester; 
Kichard  Shaw  ;  Joseph  Lees  (of  Lees  Brothers,  Limited,  Cotton  Spinners), 
Oldham  ;  Wm.  Green,  Birmingham  ;  Councillor  J.  C.  Laird,  New-Castle- 
upon-Tyne  ;  K.  W.  Granville  Smith  $  Edwd.  W.  Wrigley  (of.  Lees&  Wrig- 
ley,  Cotton  Spinners),  Oldham  ;  Richard  Williamson  (of  Williamson  & 
Sons,  Ship-owners),  Maryport ;  H.  Watson  (of  Rt.  Watson  &  Sons,  Lim- 
ited, Manufacturers),  Oswaldtwistle ;  A.  W.  Byron,  Chesterfield  ;  Alfred 
Hickman  (Ironmaster  and  Colliery  Owner),  Wolverhampton  ;  T.  F.  Firth, 
Heckmondwike  (Vice-President  of  the  Associated  Chambers  of  Com- 
merce); W.  J.  Cuthbertson,  Annan,  N.B.;  Stephen  Cocker  (of  Welch  & 
Cocker,  Cotton  Manufacturers),  Preston;  Lewis Halsam (of  John  Halsam 
&  Co.,  Bolton  and  Manchester,  Cotton  Manufacturers);  W.  R.  Moss 
(Director  of  Crosses  &  Wink  worth,  Ltd.),  Bolton;  John  P.  Halliwell 
(Cotton  Manufacturer),  Darwen;  James  Eckersley  (of  Davies  &  Ecker- 
sley,  Bleachers,  Adlington,  Lancashire)  ;  W.  S.  Miller  (Alderman  of  Bre- 
conshire),  Brecon  ;  George  Whittaker  (Cotton  Manufacturer),  Aecrington ; 
James  Pertwee,  Chelmsford ;  James  Christy,  Chelmsford  ;  William  H. 
Goodwin,  The  Ferns,  Lugwardine,  Hereford  ;  Francis  C.  Clark,  Win- 
chester. 

LONDON. 

Edward  Sassoon  (of  David  Sassoon&  Co.);  James  Greig(of  A.  Blockey, 
Greig  &  Co.,  Discount  Brokers);  Hermann  Schmidt  (Discount  Broker); 
Henry  C.  Hayter  (of  Hayter  &  Hayter,  Woollen  Manufacturers);  Wm. 
Westgarth  (of  W.  Westgarth  &  Co.),  Chairman  of  Australian  Trade  Sec- 
tion of  the  London  Chamber  of  Commerce  ;  Oscar  von  Ernsthausen  (for- 
merly of  Ernsthausen  &  Co.,  London  and  Calcutta);  F.  Eisenlohr  (of 
Ernsthausen  &  Co.,  London  and  Calcutta);  E.  Howley  Palmer  (of  Dent 


THE    SILVER    DEPUTATION.  281 

Palmer  &  Co.).  Director  of  the  Bank  of  England:  Keuben  Sassoou  ; 
Alfred  L.  Cohen  :  Ernest  Noel;  J.  V.  L.  Wells  (of  J.  W.  Laud  &  Co.)  ; 
Thomas  Haiibury  (late  Bower,  Hanbury  &  Co.,  Shanghai);  Neptune 
Blood,  Stock  Exchange  ;  R.  S.  Gundry ;  W.  Stewart  Young,  and  at  Hong- 
Koiig ;  J.  T.  Denniston,  Secretary  Mexican  Railway  Company ;  Wm. 
Paterson  (of  Paterson  &  Simons,  and  at  Singapore),  Chairman  of  the 
Chartered  Bank  of  India,  and  of  the  London,  Paris,  and  American 
Bank,  Vice-Chairmaii  of  the  India  and  China  Section  of  the  London 
Chamber  of  Commerce ;  J.  Howard  G-wyther  (Managing  Director,  Char- 
tered Bank  of  India,  Australia,  and  China);  W.  W.  Cargill,  Director  of 
New  Oriental  Bank  Corporation ;  L.  R.  C.  Boyle,  ditto  ;  G.  H.  Tod- 
Heatly,  ditto  ;  R.  T.  Rohde  (New  Oriental  Bank  Corporation);  E.  De 
Wael  (of  G.  Allard.  Banker);  Ernest  Seyd  ;  S.  Ezekiel  (of  Messrs.  David 
Sassoon  &  Co.);  C.  von  Buch  ;  A.  L.  Capput ;  W.  G.  Cuthbertson  ;  J.  R. 
Tennant ;  Wm.  Barclay ;  Col.  C.  H.  T.  Marshall ;  Henry  May ;  Hon.  G. 
T.  Maitland. 

MANCHESTER. 

John  A.  Beith  (of  Beith,  Stevenson  &  Co.,  Manchester  and  Glasgow, 
Director,  Manchester  Chamber  of  Commerce,  and  Director  of  the  Mersey 
Docks  and  Harbor  Board);  Win.  Thos.  Rothwell ;  H.  T.  Gaddum  (of  H. 
T.  Gaddum  &  Co.,  Silk  Merchants,  &c.);  H.  Lathbury  (of  Lathbury  & 
Co.);  John  Holliday  (of  Farbridge,  Holliday  &  Co.,  of  Manchester,  Glas- 
gow, Hong  Kong,  Shanghai  and  Manila,  Director  of  the  Manchester  and 
County  Bank);  J.  S.  Dods  (of  Dods,  Ker  &  Co.,  and  Calcutta);  F.  J. 
Faraday;  Samuel  Ogden  (of  S.  Ogden  &  Co.,  Chairman  of  the  Old 
Silkstone  arid  Dodworth  Coal  and  Iron  Co.,  Director  Manchester  Chamber 
of  Commerce);  James  Whitehead ;  Chas.  Macdonald  (of  Macdonald, 
Miller  &  Co.,  and  late  President  of  the  Bombay  Chamber  of  Commerce); 
Ed.  H.  Greg  (of  Robt.  Greg  &  Co.,  Cotton  Spinners  and  Manufacturers); 
A.  C.  Smethurst ;  Alexander  C.  Carus ;  Henry  McNiel. 

BLACKBURN. 

L.  Wilkinson,  of  Wilkinson  &  Son,  Cotton  Manufacturers;  Richard 
Shaw,  of  R.  &  J.  Shaw,  Cotton  Manufacturers  ;  E.  J.  Ainsworth,  of  J. 
Ainsworth  &  Sons,  Cotton  Manufacturers  ;  Thos.  Longworth,  of  Solomon 
Long  worth  &  Sons,  Cotton  Spinners  and  Manufacturers  ;  Arthur  Long- 
worth,  ditto  ;  John  Hargreaves,  Cotton  Manufacturer  ;  Jonas  Hindle,  of 
Edw.  Briggs  &  Co. ,  Cotton  Spinners,  of  Blackburn  and  Padiham  ;  J.  H. 
Hartley,  of  Hartley  Bros.,  Cotton  Spinners,  Blackburn  and  Preston ; 
Robert  Clayton,  of  H.  &  T.  Clayton,  Cotton  Manufacturers ;  Rich. 
Greenwood,  of  Greenwood  Bros.,  Cotton  Manufacturers;  Wm.  Kay,  of 
Wm.  Kay,  Sons,  Cotton  Waste  Dealers  ;  and  others.  - 


X. 

THE  MONETARY  CONGRESS  OF  THE  FRENCH 
EXPOSITION  (1889). 

OFFICIAL  DELEGATES. 

ENGLAND. — Delegates  of  the  British  Government  :  Hon. 
C.  W.  Frementle,  C.  B.,  Deputy  Master  of  the  Mint,  and 
G.  H.  Murray,  Esq.,  of  the  Treasury. 

ARGENTINE  REPUBLIC. — Delegate  Extraordinary  of  the 
Argentine  Republic  :  M.  Pellegrini,  Vice-President  of  the 
Republic ;  and  Delegate  of  the  Argentine  Commission,  M. 
Leon  Walls. 

BELGIUM. — Delegate  of  the  Belgium  Commission :  M. 
Georges  de  Laveleye,  Editor  of  the  Moniteur  des  interests 
materiels. 

BOLIVIA. — Delegate  of  the  Bolivian  Government  :  M. 
Felix  Avelino  Aramayo. 

BRAZIL. — Delegate  of  the  General  Brazilian  Commis- 
sion at  the  Exposition  :  M.  Eduardo  da  Silva  Prado. 

CHILI, — Delegate  of  the  Government  of  Chili  :  M.  Car- 
los Morla  Vicuna,  Secretary  to  the  Legation  of  Chili  in 
France. 

DENMARK. — Delegate  of  the  Government :  M.  Levy, 
Director  of  the  National  Bank  of  Copenhagen. 

DOMINICAN  REPUBLIC. — Delegate  of  the  Government : 
M.  Isidore  Mendel,  Ex-President  of  the  Chamber  of  Com- 
merce of  Santo  Domingo,  and  Ex-President  of  the  Com- 
mercial Bank  of  Santo  Domingo. 

SPAIN. — Delegate  of  the  Spanish  Commission  at  the 
Exposition  :  Don  Juan  Navarro  Reverter,  Engineer,  De- 

282 


MONETARY    CONGRESS.  283 

puty  in  the  Cortez,  and  M.  Joaquin  Lopez  Puygcerver,  Ex- 
Minister,  the  Deputy  in  the  Cortez. 

GREECE. — Delegate  of  the  Greek  Commission  at  the  Ex- 
position :  M.  Antoine  Ylasto. 

HOLLAND. — Delegate  of  The  Netherlands  Commission  : 
M.  J.  Freiwald,  President  of  the  Executive  Netherlands- 
Committee  at  Paris. 

ITALY. — Delegates  of  the  National  Italian  Committee : 
MM.  L.  Luzzatti,  Deputy  of  the  Italian  Parliament,  and 
Gentili  di  Giuseppe,  Count  of  Fantoni. 

JAPAN. — Delegate  of  the  Government  of  Japan  :  M. 
Count  Tanaka,  Minister  Plenipotentiary  of  Japan  to  Paris.. 

MEXICO.  — Delegates  of  the  Government  of  Mexico  :  MM. 
Antonio  del  Castillo,  Engineer,  and  Gilberto  Crespo. 

MONACO  (Principality). — Delegate  of  the  Government : 
M.  Jolivot,  Member  of  the  Council  of  State. 

SALVADOR  (Republic.) — Delegate  :  M.  S.  Badel. 

About  175  names  were  on  the  list  of  members  of  the  Con- 
gress. 

LIST  OF  CONGRESSES, 

Held  under  the  auspices  of  the  Ministry  of  Commerce,  Industry,  and 
Colonies,  at  the  Universal  Exposition  of  1889,  with  date  and  dura- 
tion. 

Accidents  to  Workmen,  Sept.  9-14.  Bibliography  of  Mathematical  Sci- 

JSroiiautics,  July  31  to  Aug.  3.  ences,  July  16-26. 

Agriculture,  July  3-11.  Blind,  for  the  Amelioration  of  the 

Alcoholism  (study  of  questions  rel-  Condition  of,  Aug.  5-8. 

ative  to),  July  29-31.  Carrier-Pigeon  Fanciers,  July  31  to 

Anthropology, Criminal,  Aug.  10-17.  Aug.  3. 

Anthropology     and     Archaeology,       Celestial  Photography,  . 

Prehistoric,  Aug.  19-26.  Chemistry,  July  29  to  Aug.  3. 

Architects,  June  17-22.  Chronometry,  Sept.  2-9. 

Baking  and  Bread  Making,  June  28  Colonies  (study  of  questions  relat- 

to  July  2.  ing  to),  . 


284 


APPENDIX. 


Commerce  and  Industry,  Sept.  22- 
28. 

Dentistry,  Sept.  1-7. 

Dermatology  and   Syphilography, 
Aug.  5-10. 

Dwellings  (Cheap),  June  26-28. 

Electricians,  Aug.  24-31. 

Ethnographical  Science, . 

For  the  Protection  of  Works  of  Art 
and  Monuments,  June  24-29. 

Geographical  Sciences,  Aug.  6-12. 

Homo3opathy,  Aug.  21-23. 

Horticulture,  Aug.  16-21. 

Hydrology  and   Climatology,  Oct. 
3-10. 

Hygiene  and   Demography,    Aug. 
4-11. 

Instruction,  Primary,  Aug.  11-19. 

Instruction,  Secondary  and  Higher, 
Aug.  5-10. 

Instruction,    Technical,    Commer- 
cial, and  Industrial,  July  8-10. 

Intervention  of  the  State  in  Con- 
tracts of  Labor,  July  1-4. 

Intervention  of  the  State  in  Emi- 
gration and  Immigration, . 

Intervention  of    the  State   in   the 
Price  of  Food,  July  5-10. 

Irrigation,  Sept.  22-27. 

Joint  Stock  Companies,  June  12-19. 

Life-Saving,  June  12-15. 

Mechanical  Appliances,  Sept.16-21. 

Medical  Jurisprudence, . 

Medicine,  Mental,  Aug.  5-10. 

Medicine,  Veterinary,  Sept.  19-24. 

Methods  of  Construction,  Sept.  9- 
14. 


Metrology,  Sept.  19-25. 
Mines  and  Metallurgy,  Sept.  2-11. 
Monetary,  Sept.  11-14. 
Officers  and  Non-Commissioned  Of- 
ficers of  Fire  Brigade,  Aug.  27-28. 
Otology    and    Laryngology,  Sept. 
16-21. 

Peace, . 

Photography,  Aug.  6-17. 
Physical  Exercise  in  Education  (for 

the  encouragement   of), 15 

to . 

Popular  Traditions,  . 

Profit-Sharing,  July  16-19. 

Property,  Industrial,  Aug.  3 . 

Property,  Real,  Study  of  the  Trans- 
fer of,  Aug.  8-14. 
Property,  Rights  of,  in  Works  of 

Art,  July  25-31. 
Psychology,    Physiological,    Aug. 

5-10. 

Public  Charities,  July  28  to  Aug.  4. 
Relief  Work  in  Time  of  War,  July 
28  to  Aug.  4. 

River  and  Harbor,  Oct.  7 . 

Sabbath  Observance,  . 

Society  of  Literary  Men,  June  17- 
27. 

Statistics, . 

Stenography,  Aug.  4-11. 
Stores,  Co-operative,  Sept.  8-12. 
Therapeutics,  A.ug.  1-5. 
Trades  Unions,  July  11-13. 

Unification  of  Time, . 

Women   (Works   and    Institutions 

of)- 
Zoology,  Aug.  5 . 


APPENDIX  TO  CHAPTEK  VII. 


CURRENCY    PROPOSALS    OF    D.    RICARDO. 

From  "  OBSERVATIONS  on  some  passages  in  an  article  in  the  Edinburgh  Re- 
view, on  the  depreciation  of  paper  currency  ;  also  suggestions  for  se- 
curing to  the  public  a  currency  as  invariable  as  gold,  with  a  very 
moderate  supply  of  that  metal."  (1808.) 

For  the  reader's  convenience  I  have  italicized  passages 
which  state  the  author's  views  about  silver. 

I  will  also  give  an  outline  of  the  system  of  money  then 
in  force. 

The  legal  ratio  was  15.21  to  1.  Gold  and  silver  coin 
were  unlimited  legal  tender,  but  above  25X  silver  was  legal 
tender,  not  by  tale  but  by  weight.  The  stock  had  long 
consisted  of  gold — which,  at  that  ratio,  was  the  "  cheaper 
money" — with  a  small  amount  of  worn  and  defaced  change. 
As  a  provisional  measure,  the  coinage  of  silver  had  been 
stopped  by  act  of  Parliament  in  1798,  just  after  the  sus- 
pension of  specie  payments. 

"  Let  the  Bank  of  England  be  required  by  Parliament  to 
pay  (if  demanded),  all  notes  above  20£,  and  no  other,  at 
their  option,  either  in  specie,  in  gold  standard  bars,  or  in 
foreign  coin  (allowance  being  made  for  the  difference  in 
its  purity)  at  the  English  Mint  value  of  gold  bullion,  viz., 
31.17s.  10  one-half  d.  per  ounce,  such  payments  to  com- 
mence at  the  period  recommended  by  the  committee. 

The  privilege  of  paying  their  notes  as  above  described 
might  be  extended  to  the  Bank  for  three  or  four  years  after 
such  payments  commenced,  and  if  found  advantageous, 
might  be  continued  as  a  permanent  measure.  Under 
such  a  system  the  currency  could  never  be  depreciated 
below  its  standard  price,  as  an  ounce  of  gold  and  31. 17s. 
W^d.  would  be  uniformly  of  the  same  value.  By  such 
regulations  we  should  effectually  prevent  the  amount  of 
small  notes  from  being  withdrawn  from  circulation,  as  no 

285 


286  APPENDIX. 

one  who  did  not  possess  to  the  amount  of  <£20  at  least  of 
such  small  notes  could  exchange  them  at  the  Bank,  and 
even  then  bullion,  and  not  specie,  could  be  obtainecl  for 
them.  Guineas  might,  indeed,  be  procured  at  the  mint 
for  such  bullion,  but  not  till  after  the  delay  of  some  weeks 
or  months,  the  loss  of  interest  for  which  time  would  be 
considered  as  an  actual  expense,  an  expense  which  no  one 
would  incur  whilst  the  small  notes  could  purchase  as  much 
of  every  commodity  as  the  guineas  which  they  represent. 
Another  advantage  attending  the  establishment  of  this 
plan,  would  be  to  prevent  the  useless  labor  which,  under 
our  system  previously  to  1797,  was  so  unprofitably  ex- 
pended on  the  coinage  of  guineas,  which,  on  every  occa- 
sion of  an  unfavorable  exchange  (we  will  not  inquire  by 
what  caused),  were  consigned  to  the  melting-pot,  and, 
in  spite  of  all  prohibitions,  exported  as  bullion.  It  is 
agreed  by  all  parties  that  such  prohibitions  were  ineffect- 
ual, and  that  whatever  obstacles  were  opposed  to  the  ex- 
portation of  the  coin,  they  were  with  facility  evaded. 

An  unfavorable  exchange  can  ultimately  be  corrected 
only  by  an  exportation  of  goods,  by  the  transmission  of 
bullion,  or  by  a  reduction  in  the  amount  of  the  paper  cir- 
culation. The  facility,  therefore,  with  which  bullion 
would  be  obtained  at  the  Bank  cannot  be  urged  as  an  ob- 
jection to  this  plan,  because  an  equal  degree  of  facility 
actually  existed  before  1797,  and  must  exist  under  any 
system  of  bank  payments.  Neither  ought  it  to  be  urged, 
because  it  is  now  no  longer  questioned  by  all  those  who 
have  given  the  subject  of  currency  much  of  their  consid- 
eration, that  not  only  is  the  law  against  the  exportation  of 
bullion,  whether  in  coin  or  in  any  other  form,  ineffectual, 
but  that  it  is  also  impolitic  and  unjust ;  injurious  to  our- 
selves only,  and  advantageous  to  the  rest  of  the  world. 

The  plan  here  proposed  appears  to  me  to  unite  all  the 
advantages  of  every  system  of  banking  which  has  been 
hitherto  adopted  in  Europe.  It  is  in  some  of  its  features 
similar  to  the  banks  of  deposit  of  Amsterdam  and  Ham- 
burg. In  these  establishments  bullion  is  always  to  be  pur- 
chased from  the  Banks  at  a  fixed  invariable  *price.  The 
same  thing  is  proposed  for  the  Bank  of  England ;  but  in 


EXTRACTS    FROM    RICARDO'S    WRITINGS.  287 

the  foreign  banks  of  deposit  they  have  actually  in  their 
coffers  as  much  bullion  as  there  are  credits  for  bank  money 
in  their  books.  Accordingly  there  is  an  inactive  capital 
as  great  as  the  whole  amount  of  the  commercial  circula- 
tion. In  our  Banks,  however,  there  would  be  an  amount 
of  bank  money  under  the  name  of  bank  notes  as  great  as 
the  demand  of  commerce  could  require.  At  the  same  time 
there  would  be  more  inactive  capital  in  the  bank  coffers 
than  that  fund  which  the  Bank  should  think  it  necessary 
to  keep  in  bullion  to  answer  those  demands  which  might 
occasionally  be  made  on  them.  It  should  always  be  remem- 
bered, too,  that  the  Bank  would  be  enabled,  by  contract- 
ing their  issues  of  paper,  to  diminish  such  demands  at 
pleasure.  In  imitation  of  the  Bank  of  Hamburg,  who  pur- 
chase silver  at  a  fixed  price,  it  would  be  necessary  for  the 
bank  to  fix  a  price  below  the  Mint  price,  at  which  they 
would  at  all  times  purchase,  with  their  notes,  such  gold 
bullion  as  might  be  offered  to  them. 

The  perfection  of  banking  is  to  enable  a  country,  by 
means  of  a  paper  currency  (always  retaining  its  standard 
value),  to  carry  on  its  circulation  with  the  least  possible 
quantity  of  coin  or  bullion.  This  is  what  this  plan  would 
effect.  And  with  a  silver  coinage  on  just  such  principles, 
we  should  possess  the  most  economical  and  the  most  invaria- 
ble currency  in  the  world.  The  variations  in  the  price  of 
bullion,  whatever  demand  there  might  be  for  it  on  the  Con- 
tinent, or  whatever  supply  there  might  be  poured  in  from 
the  mines  in  America,  would  be  confined  within  the  prices 
at  which  the  Bank  bought  bullion  and  the  Mint  price  at 
which  they  sold  it.  The  amount  of  the  circulation  would 
be  adjusted  to  the  wants  of  commerce  with  the  greatest 
precision  ;  and  if  the  Bank  were  for  a  moment  so  indis- 
creet as  to  overcharge  the  circulation  the  check  which  the 
public  would  possess  would  speedily  admonish  them  of 
their  error.  As  for  the  country  Banks,  they  must,  as  now, 
pay  their  notes,  when  demanded,  in  Bank  of  England  notes. 
This  would  be  a  sufficient  security  against  the  possibility 
of  their  being  able  too  much  to  augment  the  paper  circu- 
lation. There  would  be  no  temptation  to  melt  the  coin, 
and  consequently  the  labor  which  has  been  so  uselessly 


288  APPENDIX. 

bestowed  by  one  party  in  recoining  what  another  party 
found  it  their  interest  to  melt  into  bullion  would  be  effect- 
ually saved.  The  currenc}T  could  neither  be  clipped  nor 
deteriorated,  and  would  possess  a  value  as  invariable  as 
gold  itself,  the  great  object  which  the  Dutch  had  in  view, 
and  which  they  most  successfully  accomplished  by  a  sys- 
tem very  like  that  which  is  here  recommended. 

From  "  Proposals  for  an  Economical  and  Secure  Currency  ;  with  Observa- 
tions on  the  Profits  of  the  Bank  of  England  as  they  regard  the  public 
and  tbe  proprietors  of  bank  stock."  Second  edition.  London,  1816. 

SECTION  III. 

While  a  standard  is  used,  we  are  subject  to  only  such  a 
variation  in  the  value  of  money  as  the  standard  itself  is 
subject  to  ;  but  against  such  variation  there  is  no  possi- 
ble remedy,  and  late  events  have  proved  that,  during 
periods  of  war,  when  gold  and  silver  are  used  for  the  pay- 
ment of  large  armies  distant  from  home,  those  variations 
are  much  more  considerable  than  has  been  generally 
allowed.  This  admission  only  proves  that  gold  and  silver 
are  not  so  good  a  standard  as  they  have  been  hitherto 
supposed — that  they  are  themselves  subject  to  greater 
variations  than  it  is  desirable  a  standard  should  be  sub- 
ject to.  They  are,  however,  the  best  with  which  we  are 
acquainted.  If  any  other  commodity  less  variable  could 
be  found,  it  might  very  properly  be  adopted  as  the  future 
standard  of  our  money,  provided  it  had  all  the  other  qual- 
ities which  fitted  it  for  that  purpose  ;  but  wrhile  these 
metals  are  the  standard,  the  currency  should  conform  in 
value  to  them,  and  whenever  it  does  not,  and  the  mar- 
ket price  of  bullion  is  above  the  mint  price,  the  currency 
is  depreciated.  This  proposition  is  unanswered,  and  is 
unanswerable. 

Much  inconvenience  arises  from  using  two  metals  as  a 
standard  of  our  money ;  and  it  has  long  been  a  disputed 
point  whether  gold  or  silver  should  by  law  be  made  the 
principal  or  sole  standard  of  money.  In  favor  of  gold  it  may 
be  said,  that  its  greater  value  under  a  small  bulk  eminently 
qualifies  for  a  standard  in  an  opulent  country  ;  but  this 


EXTRACTS    FROM    RICARDO7S    WRITINGS.  289 

very  quality  subjects  to  greater  variations  of  value  during 
periods  of  war  or  extensive  commercial  discredit,  when  it 
is  often  collected  and  hoarded,  and  may  be  urged  as  an 
argument  against  its  use.  The  only  objection  to  the  use  of 
silver  as  the  standard  is  its  bulk^  which  renders  it  unfit  for 
the  large  payments  required  in  a  icealthy  country;  but  this 
objection  is  entirely  removed  l)y  the  substituting  of  paper 
money  as  the  general  circuTation  medium  of  the  country. 
Silver,  too,  is  much  more  steady  in  its  value,  in  consequence 
of  its  demand  and  supply  being  more  regular  /  and  as  all 
foreign  countries  regulate  the  value  of  their  money  by  the 
value  of  silver,  there  can  be  no  doubt  that,  on  the  whole, 
silver  is  preferable  to  gold  as  a  standard,  and  should  be 
permanently  adopted  for  that  purpose. 

SECTION  IV. 

In  the  next  session  of  Parliament,  the  subject  of  cur- 
rency is  again  to  be  discussed ;  and,  probably,  a  time  will 
then  be  fixed  for  the  resumption  of  cash  payments,  which 
will  oblige  the  Bank  to  limit  the  quantity  of  their  paper 
till  it  conforms  to  the  value  of  bullion.  *  *  * 

If  the  Bank  should  be  again  called  upon  to  pay  their 
notes  in  specie,  the  effect  would  be  to  lessen  greatly  the 
profits  of  the  Bank  without  a  correspondent  gain  to  any 
other  part  of  the  community.  If  those  who  use  one  and 
two,  and  even  five-pound  notes,  should  have  their  option 
of  using  guineas,  there  can  be  little  doubt  which  they 
would  prefer ;  and  thus,  to  indulge  a  mere  caprice,  a  most 
expensive  medium  would  be  substituted  for  one  of  little 
value. 

Besides  the  loss  to  the  Bank,  which  must  be  considered 
as  a  loss  to  the  community,  general  wealth  being  made  up 
of  individual  riches,  the  State  would  be  subjected  to  the 
useless  expense  of  coinage,  and  on  every  fall  of  the  ex- 
change, guineas  would  be  melted  and  exported. 

To  secure  the  public  against  any  other  variations  in  the 
value  of  the  currency  than  those  to  which  the  standard 
itself  is  subject,  and,  at  the  same  time,  to  carry  on  the 
circulation  with  a  medium  the  least  expensive,  is  to  attain 


290  APPENDIX. 

the  most  perfect  state  to  which  a  currency  can  be  brought, 
and  we  should  possess  all  these  advantages  by  subjecting 
the  Bank  to  the  delivery  of  uncoined  gold  or  silver  at  the 
mint  standard  and  price,  in  exchange  for  their  notes,  in- 
stead of  the  delivery  of  guineas ;  by  which  means  paper 
would  never  fall  below  the  value  of  bullion  without  being 
followed  by  a  reduction  of  its  quantity.  To  prevent  the 
rise  of  paper  above  the  value  of  bullion,  the  Bank  should 
be  also  obliged  to  give  their  paper  in  exchange  for  stand- 
ard gold  at  the  price  of  =£3  17 's.  per  ounce.  Not  to  give 
too  much  trouble  to  the  Bank,  the  quantity  of  gold  to  be 
demanded  in  exchange  for  paper  at  the  mint  price  of  £3 
17 s.  10J'/.,  or  the  quantity  to  be  sold  to  the  Bank  at  £3 
17s.  should  never  be  less  than  twenty  ounces.  In  other 
words,  the  Bank  should  be  obliged  to  purchase  any  quan- 
tity of  gold  that  was  offered  them,  not  less  than  twenty 
ounces  at  £3  17s.  per  ounce,*  and  to  sell  any  quantity 
that  might  be  demanded  at  £3  17s.  10^7.  While  they  have 
the  power  of  regulating  the  quantity  of  their  paper,  there 
is  no  possible  inconvenience  that  could  result  to  them  from 
such  a  regulation. 

The  most  perfect  liberty  should  be  given,  at  the  same 
time,  to  export  or  import  every  description  of  bullion. 
These  transactions  in  bullion  would  be  very  few  in  num- 
ber, if  the  Bank  regulated  their  loans  and  issues  of  paper 
by  the  criterion  which  I  have  so  often  mentioned — namely, 
the  price  of  standard  bullion,  without  attending  to  the  ab- 
solute quantity  of  paper  in  circulation.'!* 

*  The  price  of  £3  Us.  here  mentioned,  is,  of  course,  an  arbitrary 
price.  There  might  be  good  reasons,  perhaps,  for  fixing  it  either  a  little 
above  or  a  little  below.  In  naming  £3  27s.  I  wish  only  to  elucidate  the 
principle.  The  price  ought  to  be  so  fixed  as  to  make  it  the  interest  of  the 
seller  of  gold  rather  to  sell  it  to  the  bank  than  to  carry  it  to  the  mint  to 
be  coined.  The  same  remark  applies  to  the  specified  quantity  of  twenty 
ounces.  There  might  be  good  reason  for  making  it  ten  or  thirty. 

t  /  have  already  observed  that  silver  appears  to  me  to  be  the  best  adapted  for 
the  standard  of  our  money.  If  it  were  made  so  by  la'W,  the  Sank  should  be 
obliged  to  buy  or  sell  silver  bullion  only.  If  gold  be  exclusively  the  stand- 
ard, the  Bank  should  be  required  to  buy  or  sell  gold  only  ;  but  if  both 
metals  be  retained  as  the  standard,  as  they  now  by  law  are,  the  Bank 
should  have  the  option  which  of  the  two  metals  they  would  give  in  ex- 
change for  their  notes,  and  a  price  should  be  fixed  for  silver  rather  under 
the  standard,  at  which  they  should  not  be  at  liberty  to  refuse  to  purchase. 


XI. 

ME.  GOSCHEN'S  PEOPOSALS,  WITH  AN  INTEO- 

DUCTOEY  STATEMENT  CONCEENING  THE 

PEOGEESS  MADE  IN  ENGLAND. 

Mr.  Gosclien's  Proposals,  as  set  forth  in  his  address 
before  the  London  Chamber  of  Commerce,  December  2, 
1891,  embody  the  first  actual  Governmental  step  forward 
made  since  the  last  International  Conference  (1881—2). 
They  are,  however,  only  a  renewal  of  the  conditional 
offer  communicated  on  the  part  of  the  Gladstone  Govern- 
ment to  the  Conference  in  Paris  in  1881  (see  pp.  21, 
71-2,  297),  and  it  may  therefore  seem  that  after  all 
no  progress  has  been  made  in  these  ten  eventful  years. 
But  this  inference,  however  plausible,  would  be  a 
mistake. 

A  brief  analysis  will  outline  the  decade's  progress  in 
the  practical  politics  of  silver,  and  show  that  in  spite  of 
appearances  "  the  world  does  move  "  in  this  respect. 

First  we  must  take  account  of  a  retarding  influence, 
which  in  detail  comes  home  to  every  one's  personal  ex- 
perience, but  which  few  take  the  trouble  to  appreciate 
as  applied  on  a  grand  scale,  to  the  conduct  of  nations. 
Our  great  project  of  getting  silver  remonetized  in  Eu- 
rope has  its  theoretical  side  ;  opening  a  vista  for  argu- 
ment of  almost  limitless  extent.  The  subject  is  in  fact 
so  extensive  that,  if  dealt  with  excursively  in  a  pedantic 

291 


292  APPENDIX. 

spirit,  it  may  be  made  to  resemble  a  morass  of  problems 
with  lakes  here  and  there  that  have  no  bottom.  What 
the  outcome  may  be  for  those  who  would  sound  all 
depths  is  suggested  by  the  well-known  saying  that 
couples  the  currency  with  love  and  religion  as  the  fa- 
vorite path  by  which  feeble  or  overwrought  minds  fall 
into  lunacy. 

On  the  other  hand,  our  project  of  joint  action  of  na- 
tions is  practical,  a  project  of  action.  It  is  action  on  a 
large  scale,  it  is  true,  a  union  not  of  individuals,  nor  of 
corporations,  but  of  nations.  Still  it  is  only  joint  action 
to  obtain  a  common  benefit.  To  bring  it  about,  requires 
of  course  a  certain  effort.  Brains  and  will  must  be 
bent  to  the  work,  trouble  must  be  taken,  travelling  be 
done,  the  peculiar  interests  of  various  countries  studied, 
the  "  personal  equation "  of  their  controlling  forces 
learned,  and  conversations  must  go  on  in  the  several 
languages  required,  etc.,  etc.  All  this  is  within  the 
means  at  hand.  The  agents  can  be  put  in  the  field,  pro- 
vided existing  powers  and  resources  are  employed  to 
that  end. 

But  initiative  is  necessary ;  if  a  thing  is  to  be  done,  it 
will  not  do  itself ;  some  one  must  do  it.  This  "  some  one  " 
ought  to  be  a  government — for  who  else  will  take  the 
trouble?  If  the  governments  do  not  all  rush  forward 
to  transact  the  necessary  business  of  establishing  their 
silver  syndicate,  then  one  or  more  of  them  must  begin 
the  work,  and  maintain  it  consistently,  and  upon  that 
the  history  of  the  decade  will  depend. 


MR.  GOSCHEN'S  PROPOSALS.  293 

Now  there  lias  been  no  such  persevering  initiative  ! 

In  1878  the  United  States  did  indeed  take  the  lead  by 
Act  of  Congress,  and  its  proposals  were  made  to  dele- 
gates of  the  nations  and  recommended  by  arguments 
which,  I  may  be  allowed  to  say,  were  not  unequal  to 
the  occasion.  Important  events  occurred  in  sequence. 
In  1879  Germany  stopped  her  sales  of  silver,  and  in  1881 
France  joined  us  in  calling  another  Conference  in  Paris 
to  promote  joint  action  for  free  coinage  of  silver.  Eng- 
land and  Germany  having  offered  substantial  aid  on 
condition  that  the  others  should  open  their  mints,  the 
Conference  was  postponed,  looking  to  the  prosecution  of 
the  project  through  personal  negotiation,  which  should 
prepare  a  practical  scheme  and  get  it  agreed  to  at  least 
provisionally  or  partially,  in  which  case  the  Confer- 
ence might  be  reconvoked,  for  such  further  discussion  as 
might  be  needed,  or  for  purposes  of  ratification. 

That  scheme  has  never  been  devised !  Why  not  ? 
The  obvious  reason  is  that  at  this  point,  in  1882,  the 
United  States  Government  suddenly  dropped  the  subject ! 

As  the  Resolutions  of  the  Conference  will  indicate  (they 
are  reprinted  on  pp.  260-1-2),  it  was  expected  that  in- 
formal conferences  of  proficient  representatives,  meeting 
in  the  different  capitals  where  they  could  talk  directly 
with  men  in  power,  and  with  the  frankness  of  privacy 
discuss  new  points  as  they  arose,  would  be  productive  of 
results  which  were  in  fact  lacking  to  a  formal  Confer- 
ence of  Delegates  in  which  speeches  were  in  order,  and 
which^as^it  met  only  in  one  place,  could  be  convenient 


294  APPENDIX. 

only  to  a  few  persons,  and  could  not  remain  long  in  ses- 
sion awaiting  discussions  by  letter  between  nonprofi- 
cient  officials  remote  each  from  the  other. 

But  the  expectation  was  never  brought  to  the  test  of 
reality,  for  the  United  States  suddenly  abandoned  the 
project  altogether. 

The  result  may  be  easily  imagined.  France  lapsed 
into  her  former  indifference.  After  this  ground  had 
been  taken  by  the  Great  Powers  who  had  invited  the 
others  to  join,  no  lesser  Power  could  move,  for  to  do 
that  was  to  invite  a  rebuff,  and  no  Power  can  afford  to 
be  careless  in  matters  relating  to  its  financial  standing. 

What  were  the  individuals  in  Europe  who  took  an  in- 
terest in  silver,  to  do  ?     As  the  only  champions  left  in 
Europe  of  the  project  thus  indefinitely  postponed  by  the 
nation  which  had  proposed  it,  they  were,  so  to  speak, 
turned  out  into  the  swamp  to  debate  the  Silver  Question 
on   general   principles.     It   was    under   these    circum- 
stances that  it  came  to  pass  that  in  England  the  Silver 
Movement   remained   so   long   in   the    academic   stage* 
Some  incidents  of  this  situation  I  have  satirized  under 
the  name  of  "  Bemuddleism,"  as  will  appear  on  page  160. 
In   time,    however,   the    unsteadiness   of    the   money 
metals    brought    its  revenges.      The  Government   was 
finally  moved  to  call  a  Royal  Commission  to  investigate 
a  Depression  of  Trade  and  Industry  (1884-6),  which  had 
been  aggravated,  admittedly  I  might  say,  by  the  non- 
adoption   of   the   project   to   restore  Silver   as   Money. 
Later,  the    subject  grew  rapidly    into  notice   with   the 


MR.  GOSCHEN'S  PROPOSALS.  295 

Commission  on  Gold  and  Silver  appointed  in  1886.  The 
outcome  of  the  latter  (Nov.,  1888),  being  in  substance 
favorable  to  silver,  the  time  drew  near  when  the  Silver 
Party  in  England  were  at  length  enabled  to  exercise 
themselves  in  the  evolutions  of  practical  politics. 

Of  their  efforts,  Mr.  Goschen's  attitude,  assumed  De- 
cember 2d,  1891,  is  one  result,  the  first  overt  result,  so 
to  speak.  It  was  evidently  a  preordained  move  in  their 
campaign  that  the  Tory  Government  should  (upon  war- 
rant of  public  opinion)  be  induced  to  march  forward  to 
the  position  assumed  by  the  Liberal  Government  in 
1881.  To  be  sure,  neither  Mr.  Gladstone  nor  his  lieu- 
tenants had  made  sign  that  they  felt  committed  by  what 
happened  in  1881.  Indeed,  the  incident  of  1881  had 
quite  passed  from  memory,  and  its  significance  was  ig- 
nored by  those  who  remembered  the  bare  fact.  So  far 
as  the  Liberal  party  chiefs  were  concerned,  tHe  efforts 
made  by  the  Liberal  silver  men  to  interest  them  in  the 
Movement  had  all  along  failed.  But  education  was  go- 
ing on,  and  the  "record"  promised  the  Liberal  an  ad- 
vantage in  any  constituency  interested  in  silver  (see 
page  317) — an  advantage  which  the  Conservative  could 
not  allow  them  to  retain. 

The  result,  then,  was  an  achievement  of  the  Silver 
Party,  a  matter  of  management. 

The  future,  likewise,  is  a  matter  of  management. 
The  advantageous  position  gained  is  a  fulcrum  for 
leverage,  to  push  farther.  Here,  then,  is  progress, 
and  in  this  direction  for  the  future  lies  the  "way  out"! 


ME.  GOSCHEN'S  PEOPOSALS. 

EXTRACTS  FROM  THE  SPEECH  OF  THE  CHANCELLOR  OF  THE  EX- 
CHEQUER ON  THE  METALLIC  RESERVE  OF  THE  BANK  OF  ENG- 
LAND AND  A  METHOD  OF  INCREASING  IT  BY  THE  ISSUE  OF  ONE- 
POUND  NOTES,  BEFORE  THE  LONDON  CHAMBER  OF  COMMERCE 

ATA  SPECIAL  GENERAL  MEETING  DECEMBER  2,  1891.  SIR  JOHN 
LUBBOCK,  M.P.,  IN  THE  CHAIR,  AND  ABOUT  750  PERSONS 
PRESENT.— FROM  THE  LONDON  "  TIMES,"  DEC.  31,  1890. 

You  will  observe  I  have  made  no  allusion  to  the  10s 
notes.  I  took  such  pains  as  I  could  to  ascertain 
whether  the  10s  notes  would  or  would  not  be  acceptable 
to  the  community  at  large,  and  the  result  I  arrived  at 
was  this — that  they  would  be  extremely  unpopular  in 
most  parts  of  the  country,  but  that  there  was  one  part 
of  the  country — Lancashire — where  they  would  value 
the  10s  notes,  not  entirely  on  account  of  the  note  itself, 
but  because  of  its  being,  at  all  events,  some  recognition 
of  silver  performing  a  part  in  the  currency.  It  is  from 
that  point  of  view  that  they  value  the  10s  note.  It 
would  not  have  increased  the  use  of  silver  much,  for  it 
would  have  been  necessary  to  hold  only  a  very  small 
portion  of  silver  against  these  notes  if  they  were  issued. 
It  was  however  considered  a  valuable  recognition,  and  in 
telling  you  that  I  feel  that  I  could  not  recommend,  after 
the  evidence  I  have  had,  the  adoption  of  10s  notes,  at  all 
events  until  we  have  had  very  considerable  experience  of 
the  1£  notes  :  at  the  same  time  my  dropping  that  part  of 
my  plan  must  not  lead  any  one  to  suppose  that  I  recede 
in  any  way -from  the  position  which  I  have  always 
maintained  of  being  anxious  to  see  the  use  of  silver 
extended  as  far  as  it  was  possible  to  be  done  under  our 
existing  system.  I  have  done  what  I  could  to  increase 

296 


MR.  GOSCHEN'S  PROPOSALS.  297 

the  use  of  silver.  There  is  a  section  in  the  country  who 
are  showing  a  growing  interest  in  the  silver  question 
that  cannot  be  ignored. 

They  may  ask  this :  If  you  will  not  do  what  we  want 
—namely,  make  any  real  forward  movement  in  estab- 
lishing a  parity  between  gold  and  silver — if  you  will  not 
do  that  yourselves  as  a  Government,  would  you  do  what 
you  could  in  conference  with  other  Governments  to  pro- 
mote the  use  of  silver  in  those  other  countries  by  offer- 
ing as  much  as  you  can  do  without  an  abandonment  of 
your  own  principles?  Well,  I  think  that  that  is  a 
demand  that  may  be  made  now,  but  which  has  not  been 
made  for  the  first  time.  It  was  made  in  1881,  and  at 
that  time  a  Monetary  Conference  was  held,  at  which  Sir 
Charles  Fremantle  and  another  gentleman  represented 
this  Government,  and  they  were  authorized  to  make 
this  declaration  to  the  Conference :  That  if  the  Mints  of 
France,  the  United  States,  and  other  countries  were 
open  to  the  free  coinage  of  silver,  the  Bank  of  England 
should  be  asked  to  act  upon  that  portion  of  the  Bank 
Charter  Act  which  enables  it  to  hold  a  portion  of  its 
bullion  in  silver.  The  Bank  acceded  at  that  time  to 
that  request,  and  the  result  was  a  letter,  which  I  will 
read,  from  the  Secretary  to  the  Treasury  to  the  Bank  of 
England.  It  was  as  follows  : 

TEEASUEY  CHAMBEES,  July  1,  1881. 
GENTLEMEN  : 

I  am  directed  by  the  Lords  Commissioners  of  Her 
Majesty's  Treasury  to  acknowledge  the  receipt  of  your 
letter  of  the  30th  ultimo,  in  which  you  state  that  the 
Bank  Court  see  no  reason  why  an  assurance  should  not 
be  conveyed  to  the  Monetary  Conference  at  Paris,  if  the 
Treasury  think  it  desirable,  that  the  Bank  of  England, 
agreeably  with  the  Act  of  1844,  will  be  always  open  to 


298  APPENDIX. 

the  purchase  of  silver,  provided  that  the  Mints  of  other 
countries  return  to  such. rules  as  would  ensure  the  con- 
version of  gold  into  silver  and  silver  into  gold. 

My  Lords  are  of  opinion  that  such  an  assurance  is  de- 
sirable, provided  always  that  it  be  understood  that  the 
silver-using  countries  are  to  permit  a  free  coinage  of 
silver ;  and,  as  they  note  the  opinion  of  the  Bank  Court 
that  the  exercise  of  that  power  by  the  Bank  would  not 
involve  a  risk  of  infringing  the  principle  of  the  Act  of 
1844,  they  have  communicated  a  copy  of  your  letter  to 
the  Secretary  of  State  for  Foreign  Affairs,  and  have  re- 
quested him  to  convey  to  the  Monetary  Conference  the 
intimation  that  the  Bank  of  England,  agreeably  with  the 
Act  of  1844,  but  under  the  condition  which  you  describe, 
will  be  open  to  the  purchase  of  silver. 
I  have,  &c., 

(Signed)  F.  CAVENDISH. 

The  Governor  and  Deputy  Governor 
of  the  Bank  of  England. 

This  was  the  letter  which  was  sent  in  1881  from  the 
Treasury  to  the  Bank  of  England,  and  at  that  time  the 
Government  of  India  further  suggested  that  if  these 
countries  would  agree  to  open  their  Mints  to  silver, 
India  would  agree  that  so  long  as  that  system  was  main- 
tained, she,  too,  would  keep  her  Mint  open  to  silver. 
Those  were  practically  the  only  two  things  which  this 
country  could  offer.  I  believe  another  point  was 
mooted,  namely,  whether  the  legal-tender  limit  could 
be  raised  from  2£  to  5£,  but  I  have  no  accurate 
information  on  that  point.  What  I  have  got  to  say  is 
this,  that  so  far  as  the  Government  of  1881  went,  we 
might  safely  go  again  if  the  necessity  arose.  I  know 
there  is  considerable  stir  and  anxiety  upon  the  part  of 
other  countries.  I  know  there  is  considerable  desire 
for  a  conference.  I  am  anxious  for  the  increased  use  of 
silver,  and  personally — I  am  speaking  without  com- 


ME.  GOSCHEN'S  PROPOSALS.  299 

nmnication  with  my  colleagues  or  the  Bank  of  England 
on  the  subject — I  have  been  always  anxious  to  see  the 
use  of  silver  extended  as  far  as  it  could  be  done  com- 
patibly with  our  general  arrangements.  I  have  stated 
this,  and  have  stated  it  without  knowing  whether  the 
Bank  of  England  hold  at  present  the  same  opinion  that 
they  held  then ;  but  I  was  anxious,  as  great  interest  has 
been  expressed  on  this  matter,  to  show  how  far  I  con- 
sider personally  the  Government  might  be  able  to  go. 
And  do  not  let  it  be  thought  that  if  such  an  arrangement 
were  carried  out,  and  the  Bank  of  England  were  to  hold 
a  portion  of  their  reserve  in  silver,  on  the  express  condi- 
tion that  other  countries  would  keep  their  Mints  open 
for  silver  as  Avell  as  gold,  it  would  be  in  any  way  in  con- 
tradiction to  the  policy  we  all  desire  to  see  followed,  that 
the  stock  of  bullion  in  the  Bank  of  England  should  be 
largely  increased,  because,  by  the  adoption  of  free  mint- 
age in  other  countries,  the  pressure  upon  our  stock  of 
gold  would  be  considerably  avoided.  The  pressure  upon 
our  stock  of  gold  naturally  has  been  increased  and  inten- 
sified when  other  countries  passed  to  a  monometallic 
system  instead  of  a  bimetallic  system.  Therefore,  there 
is  no  contradiction  whatever  in  saying  that  on  that  con- 
dition, but,  let  it  be  fairly  understood  on  that  condition 
only,  I  do  not  see  why  the  Bank  of  England  might 
not  be  invited  to  repeat  such  a  declaration  as  that  of 
1881. 

*  -X-  •&  •&  -X-  *  -X- 

Now  I  want  you  to  understand  this — probably  you 
understand  it,  but  I  want  the  public  to  do  so — that  the 
Government  as  a  government  have  no  power  to  force  any 
particular  kind  of  circulation  on  the  country.  The  let- 
ters I  have  received  about  the  supply  of  silver,  for 
example,  have  been  innumerable.  'Why  don't  you  let 


300  APPENDIX. 

us  have  more  silver?  '  Good  heavens,  I  wish  every  one 
would  take  as  much  silver  as  possible,  considering  the 
enormous  profit  the  Exchequer  makes  by  it.  We  have 
untold  sums  at  the  Bank  of  England  and  at  the  Mint 
waiting  to  be  circulated,  anxious  to  travel  [laughter], 
but  they  are  not  invited.  I  do  not  know  who  the  per- 
sons are  who  do  not  extend  the  invitation  to  these  silver 
coins  to  pay  a  visit  to  the  country ;  but  at  all  events 
some  of  those  who  spread  the  circulation  of  the  country 
— all  of  them — have  got  far  more  power  to  determine 
what  circulation  there  shall  be  in  the  country  than  the 
Government. 


XII. 

A   TEACT   ON   SILYEE   POLICY. 

DISTRIBUTED  BY  THE   PARLIAMENTARY   SILVER  COMMITTEE 
TO  MEMBERS  OF  PARLIAMENT  (APRIL,  1891). 

The  paramount  issue  is  whether  stable  parity  of 
silver  and  gold  is  or. is  not  a  great  interest  of  the  British 
Empire. 

Of  course  we  think  the  affirmative  is  true,  and 
indeed  obviously  true.  We  think  that  the  importance 
of  that  interest  is  above  and  beyond  all  local  preference 
or  petty  convenience  as  to  yellow  metal  or  white,  or 
light  or  heavy,  and  as  England  is  the  leading  centre  of 
international  trade  and  international  investment,  we 
believe  that  here  is  the  spot  where  that  truth  ought  to 
be  recognized.  How,  then,  does  the  case  stand?  How 
far  is  our  affirmative  recognized  V 

I  find  the  difference  of  opinion  a  difference  mainly  of 
degree,  not  of  kind.  The  chief  point  unsettled  is  how 
much  it  is  worth  ivhilefor  England  to  do  in  order  to  obtain 
the  benefits  of  stable  parity. 

Between  the  anti-silver  policy  looking  to  demonetiza- 
tion and  the  pro-silver  policy  looking  to  remonetization, 
the  choice  is  made.  England  is  in  favor  of  the  Eestora- 
tion  of  Silver.  Only  as  to  the  quota  of  action  to  be 
furnished  in  England — the  United  Kingdom's  share  in 
the  sum  of  co-operation  required — there  are  differences 
of  opinion. 

So  far  as  the  point  of  principle  is  concerned,  that  has 
been  admitted  by  the  Government  of  the  United  .King- 
dom. Its  representation  at  the  International  Monetary 

301 


302  APPENDIX. 

Conference  of  1881  had  that  effect.  England  was  in 
favor  of  the  Kestoration  of  Silver.  I  refer  not  merely  to 
the  attitude  of  India  as  presented  by  Sir  Louis  Mallet 
and  Lord  Eeay.  The  communication  by  Sir  Charles 
Fremantle  to  the  effect  that  the  Bank  of  England  would 
hold  silver  bullion  against  its  notes  up  to  the  legal  limit 
(one  part  of  silver  to  four  of  gold),  in  case  free  coinage 
of  silver  should  be  resumed  by  other  countries,  was  a 
recognition  on  the  part  of  the  Government  of  its  interest, 
and  of  its  faith  in  the  practicability  of  the  measures  pro- 
posed for  the  maintenance  of  parity,  and  that  its  interest 
was  an  important  interest.  I  have  further  been  informed 
that  it  was  understood  at  the  time,  though  not  formally 
offered,  that  parliamentary  authority  would  be  asked 
and  obtained,  in  case  of  need,  to  raise  the  legal-tender 
limit  of  English  silver  coin.  The  object  of  the  offer 
made  was  to  induce  France  and  the  United  States  to 
establish  free  coinage. 

Are  our  friends  fully  aware  of  this  ?  I  fear  they  are 
not.  To  ensure  attention  I  bring  to  your  notice  the 
accompanying  letter  (page  317),  in  which  no  less  an 
authority  in  the  Government  of  the  United  Kingdom 
than  the  Lords  Commissioners  of  Her  Majesty's  Treasury 
will  be  found  to  have  stated  the  point  very  clearly. 

Unfortunately  the  quota  of  co-operation  thus  offered 
on  the  part  of  the  United  Kingdom  was  not  regarded  as 
sufficient  to  warrant  the  other  Powers  in  undertaking 
the  measures  needed  to  establish  the  desired  parity. 

Then  came  the  establishment  of  your  League.  What 
was  its  object  ?  It  was  established  with  a  practical  end, 
namely,  to  bring  about  such  co-operation  of  the  United 
Kingdom  as  should  be  needed,  an  end  to  be  attained  by 
the  obvious  means  of  enlightening  public  opinion  as  to 
the  degree  of  its  importance.  These  offers  already  made 


TRACT    ON    SILVER    POLICY.  303 

were  of  course  to  be  kept  in  validity.  In  marking  out 
in  its  platform  what  was  believed  to  be  the  proper  quota 
for  the  United  Kingdom,  the  League  assigned  no  limit. 
They  were  for  free  coinage  of  silver,  asking  no  less  from 
England  than  from  the  United  States  and  France.  Such 
then  was  the  task  assumed  by  the  League. 

But  little  time  elapsed  after  its  foundation  before 
events  began  to  force  themselves  upon  public  attention 
which  justified  its  views  in  a  very  practical  way.  The 
depression  of  trade  and  industry  in  Great  Britain 
attained  such  depth  as  to  necessitate  a  Koyal  Commis- 
sion of  inquiry,  which  in  time  gave  way  to  a  Royal 
Commission  on  Gold  and  Silver. 

What  was  the  result  of  all  these  years  of  discussion 
in  which  the  League  bore  its  share  ?  The  minimum 
result  is  to  be  found  in  the  admission  on  the  "  gold  side  " 
(so  called)  of  the  Royal  Commission  ;  the  maximum  is 
to  be  found  on  the  "  silver  side."  Of  the  latter  I  need 
only  say  their  ground  was  the  ground  of  the  League  ; 
that  the  degree  of  importance  they  assigned  to  this 
interest  of  the  Empire  was  a  very  high  one,  and  it 
was  urged  that  diplomatic  initiative  of  Her  Majesty's 
Government  be  brought  to  bear  to  push  joint  action  of 
nations  to  restore  silver  to  general  free  coinage  (Part 
III.,  section  36). 

In  estimating  the  attitude  of  the  "gold  side"  of  the 
Eoyal  Commission  account  must  naturally  be  taken  of 
the  strategic  bearings  of  their  position.  Predispositions 
and  presumptions,  as  well  as  prejudices,  were  in  favor 
of  inaction.  Nothing  was  easier  than  to  shrink  from  "a 
leap  in  the  dark  "  without  realizing  that  this  leap  was 
after  all  but  a  step  from  a  bed  to  a  carpeted  floor.  It 
was  thus  in  spite  of  all  temptations  that  they  were 
willing  to  do  what  they  did,  and  that  was  nothing  less 


304  APPENDIX. 

than  to  undertake  a  certain  initiative  in  favor  of 
silver. 

What  were  the  avowed  objects  in  view  ?  I  find  the 
purpose  avowed  to  "  relieve  tension  of  the  present  situa- 
tion." I  also  find  the  purpose  avowed  to  prevent  "  an 
apprehended  further  fall  in  silver,"  and  to  keep  its 
"  value,  relatively  to  gold,  more  stable."  Here  are  pur- 
poses in  sympathy  with  our  own.  But  is  there  not, 
beyond  and  behind  all  this,  implicitly  present,  though 
not  avowed  in  plain  terms,  the  very  practical  and  diplo- 
matic idea  that  if  the  joint  action  so  recommended  be 
set  on  foot,  free  coinage  of  both  metals  in  other  nations, 
and  hence  parity  of  the  money  metals,  will  be  the  result? 
I  find  that  very  practical  and  diplomatic  idea  to  have 
been  entertained  in  manner  and  form  as  set  forth  in 
the  sequel  to  this  paper. 

I  speak  here  seriously  of  what  is  suggested  as  well  as 
of  what  is  incisively  avowed.  I  see  in  these  suggestions 
the  shadows  of  coming  events,  the  arrival  of  which  it  is 
the  business  of  reformers  to  hasten.  The  "  London 
Times  "  states  editorially  to-day  that  "  free  coinage  in 
the  United  States  would  fix  the  ratio  all  over  the  world," 
and  yet  you  can  remember  the  day  when  men  were 
called  "  lunatics "  in  London  for  saying  that  Great 
Britain,  France,  and  the  United  States  together  could 
accomplish  that  same  result.  But  I  have  seen  all  along, 
from  the  very  inception  of  the  struggle  against  and  for 
silver,  the  desire  that  some  other  nation  should  establish 
parity  between  the  money  of  England  and  the  money  of 
India  has  been  a  potent  factor  in  the  expression  of 
opinions  as  well  as  in  their  formation. 

What  then  were  the  actual  proposals  made  on  the 
"  gold  side  "  of  the  Eoyal  Commission  ?  They  lie  in 
part  within  and  in  part  outside  of  the  range  of  the 


TRACT    ON    SILVER    POLICY.  305 

proposals  made  in  1881  to  the  representatives  of  the 
nations  in  Paris. 

First,  I  mention  their  recommending  English  initiative 
to  bring  about  concerted  action  of  nations.  This  is  beyond 
the  position  taken  in  1881,  for  that  position  was  taken 
not  on  the  initiative  of  England,  but  upon  the  invitation 
of  two  other  Powers.  Thus  we  see  the  Royal  Commis- 
sion in  effect  unanimously  recommended  that  the  Govern- 
ment should  initiate  a  movement  (of  one  or  the  other  kind) 
and  actively  promote  joint  action  of  nations.  But  while 
in  respect  to  initiative  this  goes  beyond  the  attitude  of 
1881,  still,  at  the  same  time,  the  "  gold  side  "  of  the 
Eoyal  Commission  by  their  statement  of  detail  held 
themselves,  in  a  sense,  within  the  limit  of  1881,  because 
they  seriously  speak  of  using,  I  will  not  say  a  threat, 
but  a  recognized  possibility,  of  stopping  the  coinage  of 
silver  in  India,  as  an  inducement  to  other  Powers  to 
act. 

Their  proposition  "  for  relief  of  the  tension  of  the 
existing  situation  "  goes  quite  beyond  the  propositions 
of  1881.  They  propose  small  notes  based  on  silver, 
issued  either  by  the  Treasury  or  the  Bank,  as  a  measure 
to  be  taken  independently,  a  quota  to  be  offered  volun- 
tarily, without  demanding  from  other  nations  a  quid,  pro 
quo. 

In  fine  I  ascertain  that  Lord  Herschell  and  his  col- 
leagues stood  in  this  position. 

They  repudiate  the  demonetization  policy.  On  the 
contrary,  they  desire  the  Restoration  of  Silver  to  its 
former  general  legal  equality  with  gold — provided  it  is 
accomplished  by  other  nations,  with  only  limited  co- 
operation from  England  herself. 

What  is  their  upper  limit  of  co-operation  ? 

I  fix  it  as  follows  : — 


306  APPENDIX. 

They  were  willing  (see  page  28,  C)*  that  full  legal- 
tender  bank  notes  should  be  based  on  silver,  in  replace- 
ment of  gold,  to  a  limited  amount  (one  part  of  silver  to 
four  of  gold).  (This  means  that,  let  us  say,  four  million 
sovereigns  are  exported  and  so-and-so  many  million 
ounces  of  silver  are  imported.) 

2.  They  indicate  a  willingness  (see  page  27,  A)  that  the 
silver  coinage   should  be   increased.      (Something  ha& 
been  done  in  this  line,  and  thereby  a  profit  of  nearly  a 
million  sterling  registered  by  the  Treasury.) 

3.  They  also  indicate  a  willingness  (see  page  27,  B) 
that  the  legal-tender  limit  of  the  silver  coin  be  raised, 

4.  They  recommend  an  issue  of  small  notes  based  on 
silver  bullion.     (See  page  29,  D.)     (That  might  be  in- 
tended in  part  to  take  the  place  of  the  proposition  as  to 
the  Issue  Department  bullion.) 

5.  The  proposed  attitude  of  the  Ministry  referred  to,  their 
favorable   disposition   and    initiative  in   promoting   joint 

action  ivith  other  nations,  may  be  held  to  have  all  these 
views  as  its  background.  (See  passages  italicized  on 
pages  26-32.) 

The  next  well-marked  stage  of  possible  active  co-opera* 
tion  above  these  is  the  acceptance  of  a  limited  amount  of 
silver  coin  as  full  legal  tender  in  England.  This,  I 
assume,  they  reject,  and  of  course  a  fortiori  they  reject 
free  coinage  of  silver  in  England.  (See  page  30  and 
author's  note.) 

It  is  important  to  note,  however,  that  there  is  a  wide 
range  for  give  and  take  between  the  last-mentioned  stage 
of  co-operation  and  the  former.  In  each  there  is  a. 
question  of  amount. 

I  find  nothing  in  the  principles  of  public  policy  laid 

*  These  page  references  are  to  the  Appendix  of  the  Tract,  which  is 
not  reprinted. 


TRACT    ON    SILVER    POLICY.  307 

down  by  Lord  Herschell  and  his  colleagues  on  the  gold 
side  which  should  prevent  their  consenting  that  the 
figures  be  raised  to  some  extent. 

For  example,  a  relaxation  of  the  present  statutory  bar 
to  the  proportion  of  silver  bullion  to  be  held  in  the  Issue 
Department  would  be  regarded  in  other  countries  as  of 
first  [importance.  Suppose  the  law  were  relaxed,  and 
silver  in  the  Issue  Department  should  be  allowed  not  in 
the  proportion  of  one  to  four,  as  at  present,  but  as  one 
to  three  or  one  to  two.  What  harm  would  that  do  (from 
the  point  of  view  of  the  Commissioners)  either  to  the 
Bank  or  the  public  ?  None  at  all !  With  silver  "  as 
good  as  gold  "  in  Paris  and  in  New  York  such  a  holding 
could  bring  no  risk  of  suspending  gold  payments,  and 
the  maintenance  of  gold  payments  is  the  main  point  in 
view.  If  a  silver  fifth  was  safe  in  1844  when  there  was 
no  treaty  and  no  identity  of  ratio  between  Paris  and 
New  York,  why  should  not  a  silver  third  be  safe  with 
New  York  and  Paris  bound  in  alliance  and  uniformity  ? 

I  may  also  repeat  here  my  statement  that  if  the  power 
of  the  Crown  should  be  fully  used  by  the  Treasury  to 
further  that  Restoration  of  Silver  which  Lord  Herschell 
and  his  colleagues  recognize  as  "the  right  direction," 
the  holding  of  silver  coin  in  England  could  be  enor- 
mously increased  without  parliamentary  action. 

The  questions  you  addressed  me,  then,  as  I  define 
them,  refer  to  the  pro-silver  movements  recommended 
by  Lord  Herschell  and  his  colleagues,  going  beyond,  as 
well  as  including,  the  propositions  of  1881. 

I  frankly  say  I  am  unable  to  see  why  the  League 
should  not,  upon  proper  occasion,  impress  upon  the 
Ministry  and  Parliament  that  the  action  thus  recom- 
mended is  but  the  minimum  imposed  by  its  duty  upon 
the  Government.  I  recall  also  that  this  position  is  nat- 


308  APPENDIX. 

urally  strengthened  at  the  present  time  by  the  fact  that 
the  "tension"  referred  to  has  again  asserted  itself  in 
unequivocal  form. 

In  reference  to  the  Royal  Commission's  view  concern- 
ing the  "tension  of  the  present  situation,"  in  1888,  it  is 
important  to  realize  that  the  Baring  crisis,  though  it 
came  two  years  later,  is  corroboration  absolute. 

Of  course  this  means  no  palliation  of  the  business 
mistakes  that  led  to  the  crisis,  whether  made  in  Argen- 
tina or  in  London.  Bod  driving  is  bad  driving,  ivhatever 
the  color  of  the  horse.  Financiering  can  be  reckless, 
whether  its  monetary  instrument  be  gold,  or  silver,  or 
paper,  or  the  several  kinds  of  money  together,  under 
divers  conditions. 

But  in  last  November  Buenos  Ayres  and  London,  and 
then  in  sympathy  with  London,  all  financial  nerve-centres 
of  the  world,  felt  a  "  tension "  of  a  particular  kind. 
There  was  a  tension  which  full  compliance  with  the 
recommendations  of  the  Commission  would  have  allayed, 
an  intense  desire  and  need  of  laying  hold,  not  merely  of 
capital,  but  of  cash,  and  not  merely  of  cash,  but  of  a 
particular  kind  of  cash — the  yellow  kind.  If  the  world's 
entire  stock  of  money  had  been  available  where  the 
pressure  was  hottest,  there  would  have  been  elasticity 
instead  of  rigidity.  It  was  this  rigidity  which  sharpened 
the  crisis,  a  crisis  "  whose  gravity  no  fertile  imagination 
could  exaggerate,"  as  Mr.  Goschen  has  authoritatively 
observed,  "  a  crisis  which  risked  the  supremacy  of  Eng- 
lish credit,  risked  the  transfer  of  business  to  other  cen- 
tres." 

From  this  point  of  view  it  is  plain  that  it  would  have 
been  well  for  the  City  of  London  if  the  advice  of  the 
Royal  Commission  had  been  adopted  by  the  Government 
at  once  in  1888  and  after. 


TRACT    ON    SILVER    POLICY.  309 

As  for  the  future,  the  abnormal  monetary  conditions 
maintained  by  the  doctrinaire  anti-parity  laws  now  in 
force  are  a  standing  danger.  Of  this  the  City  is  notified 
every  time  a  little  gold  leaves  the  Bank.  The  notifica- 
tion may  not  be  fully  understood,  but  it  is  there. 

While,  then,  the  crisis  owed  its  existence  to  bad  busi- 
ness, its  gravity  in  London  was  due,  in  important  mea- 
sure, to  bad  laws,  to  laws  which  had  created  an  artificial 
rigidity,  a  sort  of  lop-sided  and  top-heavy  system,  whose 
purely  gratuitous  excrescences  of  the  doctrinaire  order 
enhance  the  normal  risks  of  business.  So  this  pet  of  the 
doctrinaires,  the  policy  of  preventing  parity  of  moneys, 
has  its  revenges.  When  will  the  lesson  be  learned — the 
lesson  presented  by  the  spectacle  of  last  November, 
"money"  at  7  per  cent  in  London,  with  a  prospect  of 
widespread  ruin  that  would  have  devastated  the  land 
but  for  that  rare  phenomenon,  a  loan  in  specie  from  the 
Bank  of  France,  and  yet  at  the  same  time  millions  sterling 
worth  of  specie  were  lying  idle  in  Bombay  and  Calcutta, 
"  money  "  being  a  drug  there  at  less  than  2  per  cent  ! 

Further  light  may  be  thrown  on  the  situation  if  we 
inquire  what  would  be  the  effect  to-day  if  the  gold  in 
Argentina  could  be  brought  to  Europe,  its  place  being 
taken  by  new  silver  coin  of  equal  value.  There  are 
11,000,000  (gold)  dollars'  worth  of  gold  there— at  least, 
so  I  am  informed  by  a  member  of  the  Argentine  Com- 
mittee— mostly  in  the  form  of  foreign  coin. 

What  would  be  the  effect  of  the  transfer?  It  would 
take  a  load  off  the  silver  market,  and  a  load  off  the 
gold  market,  and  the  banks  would  feel  as  if  rain  were 
descending  after  drought. 

And  yet  there  are  naive  casuists  who  maintain  the 
Argentine  crisis  has  nothing  to  do  with  the  silver  and 
gold  question ! 


310  APPENDIX. 

POSTSCRIPT. 

Sir  David  Barbour's  review  of  the  Indian  silver 
trouble  (in  his  financial  statement)  is  a  renewal  of  testi- 
mony, from  a  former  member  of  the  Eoyal  Commission, 
of  most  grave  effect.  It  raises  the  question  of  the  further 
demonetization  of  silver  ;  it  marks  the  present  as  a  turn- 
ing point  in  history.  No  co-operation  being  given  as  yet 
in  Europe  to  second  the  late  Act  in  relief  of  silver 
passed  in  Washington,  it  is  not  strange  that  the  future 
should  look  dark  in  Calcutta.  The  silver  that  Kournania 
sold  last  summer  is  represented  by  a  surplus  in  New 
York,  still  operative  in  cutting  down  the  proceeds  of 
Indian  taxation  !  And  how  is  it  with  the  increasing 
gold  accumulations  in  Russia  ?  What  of  the  promise  of 
gold  payments  in  Austria-Hungary,  and  gold  payments 
in  Persia?  If  such  things  are  done  or  promised,  why 
not  then  in  India,  seeing  that  America  refuses  free  coin- 
age for  silver  ? 

Sir  David  Barbour  sees  that  the  United  States  defi- 
nitely refuse  to  make  changes  in  their  monetary  system 
which  would  bring  about  an  agio  on  gold  or  an  undue 
efflux  of  it  from  the  country.  Having  refused  this  from 
the  start,  and  maintaining  that  refusal  under  conditions 
which  now  cut  off  all  chance  of  yielding — the  refusal 
has  already  gone  so  far  that  candidates  marked  out  for 
the  coming  Presidential  contest  are  regarded  as  pledged 
against  the  free  coinage  of  silver  (unless,  of  course,  in 
union  with  Europe) — the  alternatives  left  for  the  Indian 
Finance  Minister's  consideration  seem  to  be  only  the 
following  : 

Either  the  pro-silver  recommendations  of  the  Eoyal 
Commission  shall  be  adopted  by  the  English  Govern- 
ment (and  by  Parliament  where  necessary),  and  a  co- 


TRACT    ON    SILVER    POLICY.  311 

operative  movement  of  nations  to  restore  silver  set  on 
foot — 

Or  events  will  take  their  onward  course  toward  the 
rejection  of  silver  and  adoption  of  gold  in  India. 

And  then  perhaps  in  China  ? 

The  consequences  would  be  very  serious,  as  Sir  David 
Barbour  recognizes.  Most  serious  !  Still,  the  situation 
is  created  not  by  India,  but  by  the  refusal  of  those  in 
Westminster  upon  whom  action  is  incumbent,  to  give 
sequence  to  the  recommendations  of  a  Koyal  Commis- 
sion which  made  its  Eeport  more  than  two  }^ears  ago, 
after  more  than  two  years'  study. 

But  who  is  to  suffer  the  terrible  consequences  that 
would  follow  a  new  series  of  fluctuations  in  the  ex- 
changes, and  a  new  series  of  imperious  drafts  upon  that 
stock  of  gold  which  the  city  of  London  now  watches 
with  such  anxious  eyes  ?  Who  can  siijfer  more  than  Eng- 
land ? 

In  1878,  when,  during  the  Premiership  of  Lord  Beacons- 
field,  Mr.  Goschen  attended  the  Conference  on  Silver 
and  Gold  convoked  by  the  United  States  Government  at 
Paris,  his  testimony  was  given  to  the  importance  of 
stopping  the  demonetization  movement.  It  was  then  a 
publicly  recognized  interest  of  England  to  do  this.  Ger- 
many was  then  selling  silver,  and  in  other  nations  efforts 
were  making  to  set  new  sales  on  foot.  Germany  stopped 
her  sales  not  long  after,  and  no  sales  were  undertaken 
elsewhere.  If  Mr.  Goschen's  monitions  in  1878  had  this 
effect,  is  not  the  same  tendency  to  be  followed  now?  It 
would  seem  to  be  all  the  more  justified  "by  the  tension 
of  the  present  situation." 

I  am  in  position  to  recall  certain  facts  which  bear 
rather  closely  upon  that  point.  I  refer  to  bright  hopes 
that  flourished,  I  had  reason  to  think,  in  the  hearts  of 


312  APPENDIX. 

leading  men  in  those  days,  hopes  which  since  have 
shown  themselves  nil.  One  hope  was,  that  "  poor 
nations  "  would  take  more  silver,  so  that  "  rich  nations  " 
might  use  gold  without  suffering  any  disadvantage ! 
Another  hope  was,  that  "  other  countries  "  would  estab- 
lish free  coinage  of  silver,  that  they  would  establish 
Parity  by  a  new  Monetary  Union,  without  England's 
doing  anything  more  than  to  maintain  silver  in  India. 

These  hopes  to-day  seem  very  naive ;  there  is  sim- 
plicity about  them  which  it  is  difficult  to  associate  with 
grave  and  potent  men.  But  they  were  very  firmly  held, 
and  were,  I  believe,  most  effective  in  determining  the 
attitude  of  governments  in  the  early  stages  of  discus- 
sion. 

Now  experience  throws  strange  light  upon  these  illu- 
sions. I  observe  that  it  is  the  so-called  "  poor  "  coun- 
tries that  get  rid  of  silver  money.  The  Bank  of  England 
would  have  been  only  too  happy  to  get  the  gold  that 
Eussia  received  for  silver  sold  in  1890.  And  yet  Russia, 
whose  official  unit  is  the  silver  rouble,  and  whose  paper 
regime  indicates  monetary  weakness,  would  have  been 
classed  in  1878  among  those  nations  predestined  not  to 
take  gold.  Instead  of  that  her  stock  is  becoming  a 
large  one.  I  have  spoken  of  Eoumania  having  ex- 
changed silver  for  gold,  and  of  the  gold  in  Argentina ; 
and  as  I  speak  of  Argentina,  so  I  might  speak  of  Brazil, 
and  of  other  countries  beside. 

As  for  other  countries  establishing  free  coinage,  they 
have  been  waiting  for  many  years  for  the  English  Gov- 
ernment to  recognize  England's  interest  in  joining  them 
in  that  great  work  of  common  benefit.  I  should  sup- 
pose late  events  would  put  a  quietus  upon  the  expecta- 
tion that  they  will  perform  that  task  without  England's 
co-operation.  That  expectation  cannot  reasonably  sur- 


TRACT    ON    SILVER    POLICY.  313 

vive  the  gold  loan  made  in  1890  to  the  Bank  of  England 
by  the  Bank  of  France. 

In  general  the  mistakes  that  are  made  on  these  points 
in  1891  and  after,  are  likely  to  receive  attention  they 
have  hitherto  missed.  The  pardon  they  could  hitherto 
look  to  will  hardly  be  accorded  in  the  future. 


APPENDIX  OF  THE   TRACT. 

THE  ISSUE  OF  ENGLISH  FULL  LEGAL-TEN- 
DEE  NOTES  ON  A  DEPOSIT  OF  SILVEK 
BULLION,  OFFEEED  BY  ME.  GLADSTONE'S 
GOYEENMENT  TO  OTHEE  NATIONS  TO 
INDUCE  THEM  TO  ESTABLISH  FEEE 
COINAGE  OF  SILYEE. 

EXTRACT  FROM  "EETURN,  PARIS  MONETARY  CONFERENCE, 
1881,"  ORDERED  TO  BE  PRINTED  BY  THE  HOUSE  OF 
COMMONS,  AUGUST  19,  1881. 

TWELFTH  SESSION.     6th  July  1881. 

Mr.  Magnin  [the  Finance  Minister  of  France]  pre- 
sided, and  there  were  present  the  delegates  of 

Austria-Hungary,  Portugal, 

Belgium,  Bussia, 

Denmark,  Sweden, 

Germany,  Norway, 

Great  Britain,  British  Switzerland, 

India,  United  States  of 

Greece,  America,  and 

Italy,  France. 
The  Netherlands, 

*             *             #  •*             *             # 

Mr.  Fremantle  read  the  following  declaration : — 
DECLARATION  OF  THE  DELEGATE  OF  GREAT  BRITAIN. 

In  pursuance  of  the  announcement  made  to  the  Con- 
ference at  last  Saturday's  session,  I  have  the  honor  of 
making  the  following  communication  on  behalf  of  my 
Government : — 

314 


OFFER    BY    MR.    GLADSTONE'S    GOVERNMENT.      315 

The  United  States  Minister  at  London,  in  the  course 
of  a  conversation  with  Her  Majesty's  Secretary  of  State 
for  Foreign  Affairs,  having  expressed  an  opinion  that  it 
would  be  possible  to  arrive  at  an  agreement  between  the 
other  Powers  on  the  monetary  question  if  (inter  alia}  the 
Bank  of  England  should  agree  to  exercise  the  powers 
conferred  on  it  by  the  Bank  Charter  Act  of  1844  (7  &  8 
Yict.  c.  32,  ss.  2  and  3),  and  if  the  Treasury  would  put  a 
question  to  that  effect  to  the  bank  directors,  Lord  Gran- 
ville  applied  to  that  department,  and  through  that  chan- 
nel obtained  a  reply  from  the  bank  directors.  In  this 
reply  the  bank  declares  its  readiness  to  exercise  the 
power  above  mentioned,  on  condition  that  the  Mints  of 
other  nations  revert  to  the  observance  of  rules  ensuring  the 
exchange  of  gold  for  silver,  and  of  silver  for  gold,  at  a  legal 
rate* 

Her  Majesty's  Government,  having  subsequently 
learned  that  Mr.  Lowell's  action  was  in  no  way  the  re- 
sult of  instructions  from  his  Government,  did  not  deem 
it  proper  to  follow  up  the  declaration  of  the  Bank  of 
England  by  communicating  it  to  the  Conference  through 
its  delegate. 

A  similar  proposal  having,  however,  within  the  last 
few  days  been  submitted  by  the  Ambassador  of  His 
Majesty  the  King  of  Italy  at  London,  on  behalf  of  his 
Government,  Her  Britannic  Majesty's  Government  has 
promptly  given  it  the  respectful  reception  it  will  always 
accord  to  the  representations  of  one  of  the  great  Powers 
of  Europe. 

I  have,  therefore,  the  honor  of  laying  on  the  table  of 
the  Conference  the  exact  words  used  by  the  Bank  of 
England  in  the  above-mentioned  communication  : — 

*  Not  italicized  in  the  original. 


316  APPENDIX. 

"The  Bank  Charter  Act  permits  the  issue  of  notes 
upon  silver,  but  limits  that  issue  to  one-fourth  of  the 
gold  held  by  the  bank  in  the  issue  department. 

"  The  purchase  of  gold  bullion  is  obligatory  and  un- 
limited, the  purchase  of  silver  bullion  is  discretional 
and  limited,  the  distinction  being  enforced  by  the  neces- 
sity of  paying  all  notes  in  gold  on  demand. 

"  The  reappearance  of  silver  bullion  as  an  asset  in 
the  issue  department  of  the  Bank  of  England  would,  as 
is  understood  by  the  Foreign  Office  letter,  depend  en- 
tirely on  the  return  of  the  Mints  of  other  countries  to 
such  rules  as  would  ensure  the  certainty  of  conversion 
of  gold  into  silver  and  silver  into  gold.  The  rules  need 
not  be  identical  with  those  formerly  in  force ;  the  ratio 
between  silver  and  gold,  and  the  charge  for  mintage, 
may  both  or  either  of  them  be  varied,  and  yet  leave  un- 
impaired the  facility  of  exchange,  which  would  be  indis- 
pensable to  the  resumption  of  silver  purchases  by  a 
bank  of  issue  whose  responsibilities  are  contracted  in 
gold. 

"  Subject  to  these  considerations,  the  Bank  Court  are 
satisfied  that  the  issue  of  their  notes  against  silver, 
within  the  letter  of  the  Act,  would  not  involve  the  risk 
of  infringing  that  principle  of  it  which  imposes  a  positive 
obligation  011  the  bank  to  receive  gold  in  exchange  for 
notes,  and  to  pay  notes  in  gold  on  demand. 

"The  Bank  Court  see  no  reason  why  an  assurance 
should  not  be  conveyed  to  the  Monetary  Conference  at 
Paris,  if  their  Lordships  think  it  desirable,  that  the 
Bank  of  England,  agreeably  with  the  Act  of  1844,  would 
be  always  open  to  the  purchase  of  silver  under  the  condi- 
tions above  described." 


EXTEACT  FKOM  EXPLANATOEY  COEEESPOND- 

ENCE.* 

ORDERED  PRINTED  AUG.  27,  1881. 

TREASURY  to  BANK  OF  ENGLAND. 

(11,504/81.) 

Treasury  Chambers,  July  1,  1881. 
GENTLEMEN, 

I  am  directed  by  the  Lords  Commissioners  of  Her 
Majesty's  Treasury  to  acknowledge  the  receipt  of  your 
letter  of  the  30th  ultimo,  in  which  you  state  that  the 
Bank  Court  see  no  reason  why  an  assurance  should  not 
be  conveyed  to  the  Monetary  Conference  at  Paris,  if  the 
Treasury  think  it  desirable,  that  the  Bank  of  England, 
agreeably  with  the  Act  of  1844,  will  be  always  open  to 
the  purchase  of  silver,  provided  that  the  Mints  of  other 
countries  return  to  such  rules  as  would  ensure  the 
conversion  of  gold  into  silver  and  silver  into  gold. 

My  Lords  are  of  opinion  that  such  an  assurance  is 
desirable,  provided  always  that  it  be  understood  that  the 
silver-using  countries  are  to  permit  a  free  coinage  of 
silver  ;f  and,  as  they  note  the  opinion  of  the  Bank  Court 
that  the  exercise  of  that  power  by  the  Bank  would  not 
involve  a  risk  of  infringing  the  principle  of  the  Act  of 
1844,  they  have  communicated  a  copy  of  your  letter  to  the 
Secretary  of  State  for  Foreign  Affairs,  and  have  requested 
him  to  convey  to  the  Monetary  Conference  the  intimation 
that  the  Bank  of  England,  agreeably  with  the  Act  of  1844, 

*  Five  pages  are  omitted  here. 
f  Not  italicized  in  original. 

317 


318  APPENDIX. 

but  under  the  condition  which  you  describe,  will  be  open 
to  the  purchase  of  silver. 

I  have,  <fec., 

(Signed)        F.  CAVENDISH. 
The  Governor  and  Deputy  Governor 
of  the  Bank  of  England. 


The  further  pages  of  the  Appendix  of  the  Tract  are 
here  omitted.     Their  titles  are  as  follows  : 

THE  PRO-SILVER  RECOMMENDATIONS  OF  LORD  HERSCHELL  AND  HIS 
COLLEAGUES  ON  THE  "  GOLD  SIDE"  OF  THE  ROYAL  COMMISSION, 
BOTH  INCLUDING  AND  ADDITIONAL  TO  THE  QUOTA  OF  CO-OPERA- 
TION OFFERED  TO  OTHER  NATIONS  BY  MR.  GLADSTONE'S  GOV- 
ERNMENT IN  1881. 


EXTRACTS  FROM  THE  FINAL   REPORT  OF   THE  ROYAL  COMMISSION 
ON  GOLD  AND  SILVER 

The  citations  are  from  the  Report  of  the  "  gold  side  " 
of  the  Eoyal  Commission,  sections  134, 135, 136, 137, 138, 
and  are  accompanied  with  a  comment  which  seeks  to 
bring  out  a  veiled  intent  ascribed  to  the  "  Gold  "  mem- 
bers to  promote  the  Restoration  of  Silver  to  general 
legal  equality  with  gold  by  means  of  furthering  the 
action  of  other  nations,  with  only  a  limited  quota  of 
co-operation  from  England  itself. 

EXTRACT  FROM  AN  EDITORIAL   ARTICLE  IN  THE  "LONDON  TIMES," 
JANUARY  20,  1891. 

EXTRACTS   FROM   SIR    DAVID    B ARBOUR'S    FINANCIAL    STATEMENT 

FOR  1891-92. 


XIII. 
SILVEK  AND  THE  ENGLISH  ELECTIONS. 

I.  MEMORIAL  or  THE  LEADERS  OF  THE  NORTHERN  OPERA- 
TIVES. 

The  Legislative  Council  of  the  United  Textile  Fac- 
tory Workers  Association  on  Silver  issued  the  follow- 
ing declaration  at  the  close  of  November,  1891  :— 

The  Council  of  this  Association  have  for  a  considerable  period  given 
much  attention  to  the  effect  upon  the  permanent  interests  of  the  textile 
industry  of  this  country  of  the  demonetization  of  silver,  and  consequent 
absence  of  a  par  of  exchange  between  gold  and  silver  moneys.  The 
conclusion  they  have  come  to,  which  has  been  much  strengthened  by 
the  events  of  the  last  twelve  months,  is  that  the  prosperity  of  the  trade 
— in  some  branches  probably  its  very  existence — is  involved  in  the  ques- 
tion. In  the  interest,  therefore,  of  the  operatives  and  others  employed 
in  the  textile  industry  whom  they  represent,  and  whose  well-being  the 
Association  has  specially  to  safeguard,  a  clear  duty  is  imposed  upon  them 
which  they  cannot  and  must  not  evade.  That  duty  is  to  press  by  every 
legitimate  means  in  their  power  upon  those  who  have  or  seek  any  par- 
liamentary influence  the  imperative  necessity  of  insisting  that  Govern- 
ment and  Parliament  should  at  once  seriously  grapple  with  the  evils  of 
our  present  monetary  system,  and  take  such  immediate  steps  as  shall 
ensure  the  recognition  of  silver  as  standard  money  throughout  the  Brit- 
ish Empire  and  between  this  and  other  nations.  Whatever  other  ques- 
tion of  importance  may  be  before  the  country,  the  urgent  need  of  this 
reform  demands  that  it  shall  be  promptly  dealt  with,  and  it  is  pressed 
upon  this  Council  that  they  should,  without  loss  of  time,  inform  you 
that  the  circumstances  connected  with  the  trade  and  with  the  well-being 
of  those  employed  in  it  render  it  imperative  that  the  whole  force — po- 
litical and  moral— of  the  industrial  classes  of  this  country  shall  be  exer- 
cised to  promote  it  to  successful  conclusion. 

319 


320  APPENDIX. 


II.  COBBESPONDENCE  WITH  CANDIDATES  AT  THE  EOSSENDALE 

ELECTION. 

The  following  is  an  extract  from  the  Manchester  Cou- 
rier of  January  21,  1892  : 

THE  CURRENCY  QUESTION. 

The  following  correspondence  has  been  passed  between  Mr.  F.  Birt- 
wistle,  Secretary  of  the  United  Textile  Factory  Workers,  and  the  two 
candidates  : 

UNITED  TEXTILE  FACTORY  WORKERS,  EWBANK  CHAMBERS, 
17,  ST.  JAMES'  STREET,  ACCRINGTON,  January  6,  1892. 

DEAR  SIR, — I  beg  to  enclose  a  circular  which,  by  instruction  of  our 
Legislative  Council,  has  been  sent  to  members  of  Parliament  and  candi- 
dates in  the  textile  districts  of  the  North  of  England. 

The  currency  question  is  of  vital  importance  to  this  district,  and  it 
will  give  great  satisfaction  to  a  large  number  of  our  members  in  the 
Rossendale  division  if  we  can  advise  them  that,  if  returned  to  Parlia- 
ment, you  will  give  your  support  to  the  movement  for  the  recognition 
of  silver  as  standard  money  throughout  the  British  Empire  and  between 
this  and  other  nations. — Yours  faithfully,  T.  BIRTWISTLE. 

Sir  Thomas  Brooks. 


CRAWSHAW  HALL,  RAWTENSTALL,  January  13,  1892. 

DEAR  SIR, — Owing  to  so  many  engagements  I  regret  I  have  been 
unable  to  reply  to  your  letter  earlier.  Any  movement  which  would  be 
a  real  benefit  to  the  commercial  and  industrial  interests  of  the  United 
Kingdom  I  would  do  anything  in  my  power  to  aid,  but  the  question  to 
which  your  letter  refers  is  such  an  abtruse  question,  and  so  involved  in 
technical  difficulties,  that  I  have  not  yet  had  an  opportunity  of  study- 
ing it  so  much  as  I  should  wish.  I  have  observed,  however,  that  this 
is  a  question  to  which  Mr.  Chaplin,  Minister  of  Agriculture,  has  devoted 
and  is  devoting  considerable  attention,  and  also  that  Mr.  Goschen  him 
self  regards  it  in  a  favorable  light,  and  I  feel  sure  that  the  result  of 
their  considerations  will  be  to  produce  a  plan  which  will  mitigate,  if  not 
obviate,  the  present  difficulties  surrounding  the  matter,  and  to  this  end 
I  shall  be  very  glad  to  give  my  support.— Yours  truly, 

THOMAS  BROOKS. 
T.  Birtwstle,  Esq. 


SILVER    AND    THE    ENGLISH    ELECTIONS.  321 

UNITED  TEXTILE  FACTORY  WORKERS,  EWBANK  CHAMBERS, 
17,  ST.  JAMES'  STREET,  ACCRINGTON,  15th  January,  189 i. 

DEAR  SIR,— I  am  much  obliged  for  your  favor  of  the  13th  instant, 
from  which  I  am  glad  to  note  that  you  appreciate  the  difficulties  attend- 
ant on  our  present  system  of  monetary  laws,  and  that  you  will  support 
the  application  to  them  of  an  effective  remedy. 

There  is  every  reason  to  believe,  from  their  public  observations, 
that  several  members  of  the  present  Government  regard  favorably  the 
remedy  advocated  by  our  United  Textile  Factory  Workers  Association 
and  many  other  organizations,  but  we  have  found,  from  long  experi- 
ence that,  however  evidently  desirable  a  reform  may  be,  it  is  frequently 
necessary  to  bring  some  moral  pressure  upon  whatever  Government 
may  be  in  power,  and  also  on  Parliament,  in  order  to  make  sure  that  they 
will  take  prompt  action. 

We  should  therefore  like  to  be  able  to  assure  our  members  in  the 
Rossendale  division  that,  if  returned,  you  will  press  on  Government 
and  Parliament  the  views  we  support  as  necessary  to  our  welfare,  viz., 
the  necessity  of  arranging  for  the  opening  of  the  leading  Mints  of  the 
world  for  the  free  coinage  of  silver  as  well  as  gold  at  a  fixed  ratio.  Our 
members  will  expect  some  information  from  us  on  this  point,  and  I  hope 
you  will  put  us  in  a  position  to  inform  them  that  you  are  prepared  to 
do  so. — Yours  faithfully,  T.  BIRTWISTLE. 

Sir  Thomas  Brooks. 


CRAWSHALL  HALL,  RAWTENSTALL,  January  19,  189?. 

DEAR  SIR, — In  further  reply  to  your  letter,  although  I  am  wishful  to 
support  your  views,  and  think,  if  I  am  returned  to  Parliament,  that  I 
can  be  of  some  service  in  promoting  them,  you  must  kindly  excuse  my 
pledging  myself  further  until  I  have  had  an  opportunity  of  learning 
more  on  such  an  important  subject. — Believe  me,  yours  sincerely, 

THOMAS  BROOKS. 
T.  Birtwistle,  Esq. 


UNITED  TEXTILE  FACTORY  WORKERS,  EWBANK  CHAMBERS, 
17,  St.  James'  Street,  Accrington,  January  20,  18£2. 

DEAR  SIR, — I  am  in  receipt  of  your  favor  of  yesterday,  and  note  you 
wish  for  further  time  for  studying  the  currency  question,  but  that  in  the 
meantime  we  are  to  take  it  that  you  are  desirous  of  supporting  the  views 
advocated  by  our  association  on  the  subject,  and  that  if  returned  to  Par 
liament  you  would  devote  some  service  to  promote  them.  Yours 
faithfully,  T.  BIRTWISTLE. 

Sir  Thos.  Brooks. 


XIV. 


DEMONETIZATION  IN  GEKMANY  AND   IN 
AUSTEIA-HUNGAKY. 

An  Act  of  the  German  Keichstag  introduced  by  Count 
Caprivi  November  7, 1891,  and  passed  in  February,  1892, 
authorizes  the  Government  to  retire  the  "  Dollars  of  the 
Union,"  one-thaler  and  two-thaler  pieces  coined  in  Aus- 
trian Mints  under  the  Coinage  Treaty  of  Vienna  of  1857. 
The  total  amount  so  coined  was  31,115,849  thalers.  Of 
these  about  25,000,000  are  estimated  to  be  in  circulation 
in  Germany,  equivalent  in  face  value  to  17,500,000  of  our 
dollars.  There  are  various  plans  in  view  for  the  opera- 
tion so  contemplated,  one  of  them  being  the  acceptance, 
under  arrangement  supplementary  to  the  new  Commer- 
cial Treaty,  of  a  part  of  the  sum  by  Austria-Hungary, 
where  the  thalers  are  legal  tender  for  1|  gulden. 

The  long-debated  plans  in  Austria-Hungary  for 
resumption  of  specie  payment — or  establishing  parity 
between  the  paper  money,  silver  coin,  and  gold  coin  of 
the  dual  empire — have  lately  assumed  more  definite  form 
through  the  appointment  and  deliberations  of  Austrian 
and  Hungarian  Imperial  Commissions,  which  have  not 
yet  closed  their  labors.  The  eventual  adoption  of  a 
Gold  Unit  of  Coinage  is  regarded  as  nearly  certain,  and 
it  is  generally  understood  that  this  measure  will  necessi- 
tate a  considerable  acquisition  of  gold  from  other  coun- 
tries, and  also  a  considerable  demonetization  and  sale  of 
silver  now  in  use  as  coin. 

324 


BY  THE  SAME  AUTHOK. 

SILVER  AND  GOLD,  and  their  Eelation  to  the  Problem  of  Resumption. 
("Cincinnati :  Robert  Clarke  &  Co.,  1876.)  [Presented  as  a  printed  depo- 
sition to  the  Congressional  Monetary  Commission  of  1876.]  New  edition, 
January,  1877,  200  pp.  ;  with  Appendix  containing  papers  on — 

The  Laissez-faire  theory  and  Iwan  Possoschkow,  &c.,  and  reprint  of 

An  ADDRESS  TO  CONGRESS  against  the  Bland  Bill,  Dec.,  1876. 

Monetary  Malaria,  or  the  Health  of  Nations,  1877. 

The  MONETARY  SITUATION.  (Cincinnati:  Robert  Clarke  &  Co.,  May, 
1878.)  Being  an  Address  before  the  American  Social  Science  Associa- 
tion, and  containing  also  as  Appendix  papers  on — The  Prussian  Anti-Silver 
Theory,  and  its  origin  in  an  historical  error.- — General  Restoration  of  Sil- 
ver, a  condition  precedent  to  successful  cancellation  of  paper  money 
(1877).  A  Vindication  of  the  practicability  of  Bimetallic  Union  (1877). 

SPEECHES  IN  THE  INTERNATIONAL  MONETARY  CONFERENCE  or  1878,  and 
DOCUMENTS  presented. — In  "  Proces-Verbaux,"  or  Report  [original  in 
French]  of  the  Proceedings  of  the  Conference,  etc.  (Paris :  Imprimerie 
Nationale,  Nov.  1878,  folio.)  Ditto  in  English  Translation  in  THE  DOC- 
UMENT or  THE  CONFERENCE  OF  1878.  (Washington  :  Government  Print- 
ing Office,  July,  1879.  918  pp.,  8vo.  &  4to.)  This  volume  comprises 
also  the  two  following  Titles. 

HISTORICAL  MATERIAL  FOR  THE  STUDY  OF  MONETARY  POLICY  (518  pp.) 
Consisting  chiefly  of  documents  illustrating  the  monetary  history  of 
France,  England,  and  the  United  States  (of  which  many  are  printed  for 
the  first  time  from  MSS.,  and  others  for  the  first  time  translated),  com- 
piled and  edited  as  a  partial  DOCUMENTARY  HISTORY  OF  MONETARY  POLICY; 
and — 

CONTRIBUTIONS  TO  THE  STUDY  OF  MONETARY  POLICY  (125  pp.).  Con- 
sisting of  Historical  and  Doctrinal  Essays  and  a  Bibliography  of  Money, 
and  including  the  Essay  next  hereinafter  named. 

THE  POSITION  OF  LAW  IN  THE  DOCTRINE  OF  MONEY,  and  other  papers. 
(London  :  1882.)  La  Monnaie  et  la  Loi.  Traduction  par  Emile  de 
Laveleye.  (Paris:  Guillaumin  et  Cie.,  May,  1881.)  Das  Geld  und  das 
Gesetz  nebst  Rede  iiber  das  Interesse  der  Vereinigten  Staaten  an  der  Sil- 
berfrage.  Uebersetzung  von  E.  Koch.  Koln  :  Heiniann,  August,  1881.) 

Sir  Isaac  Newton  and  England's  Prohibitive  Tariff  upon  Silver  Money  ; 
an  open  letter  to  Prof.  W.  S.  Jevons.  (Cincinnati :  March,  1881.) 

DlSCOURS  PRONONCES  ET  DOCUMENTS  PRESENTES  DANS  LA  CONFERENCE 

MONETAIRE  INTERNATIONALE  DE  1881. — In  Proces-Verbaux.  (Paris  :  Im- 
primerie Nationale,  August,  1881,  (folio.)  [Also  separate  edition,  77  pp. 
folio.]  Ditto  in  English  Translation  :  Report  of  Proceedings  of  Confer- 
ence of  1881.  Blue-Book.  (London:  Spottiswoode,  September,  1881, 
folio),  and  published  by  Department  of  State  (Washington  :  November, 
1881)  ;  also  in  German  Translation.  Published  by  the  German  Govern- 
ment. (Berlin:  1882.) 

SILVER  AS  AN  INTERNATIONAL  QUESTION.  An  Address  to  Congress ; 
being  a  letter  written  in  response  to  a  request  of  Hon.  A.  H.  Buckner, 
of  Missouri,  Chairman  of  the  Committee  of  the  House  of  Rep's,  on  Cur- 
rency and  Banking.  (Washington,  Feb.,  1885.) 


•  REASONS  FOB  SUSPENDING  SILVER  COINAGE.  An  Address  delivered  in 
response  to  the  invitation  of  the  Executive  Committee  of  the  NATIONAL 
COMMERCIAL  CONVENTION,  at  its  meeting  in  Atlanta,  Georgia,  May  21, 
1885.  Also  Extracts  printed  by  the  New  York  Board  of  Trade  and 
Transportation,  July,  1885. 

The  British  Standard  of  Value  :  an  Address  before  Section  F.  (Eco- 
nomic Science  and  Statistics)  of  the  British  Association  for  the  Advance- 
ment of  Science,  Sept.,  1885,  with  Appendix,  of  documents  now  first 
brought  to  notice,  including  Monetary  Keports  of  JOHN  LOCKE,  and  of 
SIR  ISAAC  NEWTON,  (1701-2,  Editio  Princeps,  privately  printed,  from  MSS. 
found  by  the  author  of  the  address).  Extracts  read  by  a  member  of  the 
Committee,  and  Abstracts  printed  for  distribution. 

Ought  the  National  Banking  System  to  be  abolished  ?  {Norih  Am. 
.Be®.,  Sept.,  1885.) 

THE  INTERNATIONALLY  or  THE  SILVER  QUESTION.  An.  Address  prepared 
at  the  invitation  of  the  Executive  Committee  of  the  American  Bankers' 
Association,  for  its  meeting  at  Chicago,  September  24,  1885.  (Bankers' 
Pub.  Assoc!,  New  York,  1885.) 

A  Chapter  on  Monetary  Policy.  (N<>rt,1i  Aincr/cati  Iterieir,  December, 
1885.) 

SILVER  :  AN  ISSUE  OF  INTERNATIONAL  POLITICS.  An  Address  to  Con- 
gress, March,  1886.  (Cincinnati:  K.  Clarke  &  Co.,  1886.) 

THE  BANKING  COMMUNITY  AND  THE  SILVER  QUESTION.  An  Address 
delivered  at  the  Annual  Convention  of  the  American  Bankers'  Associa- 
tion, Aug.  21,  1886,  at  Boston.  (In  Report  of  Convention,  American 
Bankers'  Pub.  Assoc.) 

Silver  before  Congress  in  1886.  (  Quart.  Journal  <>f  Economic*.  Boston : 
Ellis,  Oct.,  1886.)  . 

THE  SILVER  POUND  and  ENGLAND'S  MONETARY  POLICY  since  the  RESTO- 
RATION ;  together  with  the  HISTORY  OF  THE  GUINEA,  illustrated  by  Con- 
temporary Documents.  300  pp.  (London  :  Macmillan  &  Co.,  1887.) 

MONETARY  HISTORY  AND  MONETARY  JURISPRUDENCE  :  an  Address  before 
Section  F.  (Economic  Science  and  Statistics)  of  the  British  Association 
for  the  Advancement  of  Science,  Sept.,  1887.  Printed  in  "  the  Currency 
Question  before  the  British  Association,"  published  by  the  Bimetallic 
League.  (Manchester,  1887.) 

Remarks  upon  Silver  as  Standard  Money  in  England,  at  an  interview 
with  the  members  of  the  Board  of  Directors  of  the  Manchester  Chamber 
of  Commerce,  at  a  called  meeting,  Nov.  2,  1887.  (Stenographic  report 
printed  for  the  use  of  the  Directors.) 

THE  UNITED  STANDARD  :  Answers  to  the  Questions  of  the  ROYAL  COM- 
MISSION ON  GOLD  AND  SILVER,  Feb.,  1888.  (Appendix  to  Final  Report, 
Oct.  1888.  Blue-Book.) 

THE  PARITY  OF  MONEYS  as  regarded  by  Adam  Smith,  Ricardo,  and  Mill. 
An  open  Letter  answering  a  question  of  a  Member  of  the  ROYAL  COM- 
MISSION on  Gold  and  Silver.  By  Amicus  Curiae.  London,  June,  1888. 
Also  read  before  Section  I.  (Economic  Science  and  Statistics)  of  the 
American  Association  for  the  Advancement  of  Science,  Aug.  20, 1888. 
(London:  Macmillan  &  Co.,  1888.) 

OBSERVATIONS  au  Congres  Mone'taire  de  1'Exposition  en  reponse  a  MM. 
Levasseur  et  Du  Puynode.  Sept.  13,  1889.  (Paris:  Guillaumin  &  Cie.) 

INSTRUMENTS  OF  VALUATION.  An  Address  before  the  American  Met- 
rological  Association.  Washington,  April  22,  1890.  (Report  of  Proceed- 
ings.) 


RECENTLY   ISSUED, 

Large  8vo,  314  pp.,  cloth,  $4.00. 

THE    SILVER    POUND 

AND 

ENGLAND'S   MONETARY  POLICY  SINCE 
THE  RESTORATION, 

TOGETHER   WITH    THE 

HISTORY   OF   THE   GUINEA, 

ILLUSTRATED    BY 

CONTEMPOKARY  DOCUMENTS. 


LONDON : 
MACMILLAN  AND  Go. 

1887, 

(Opinions  of  the  9?ress. 

THE  ACADEMY  [London  Weekly],  July  30,  1887. 

Mr.  Dana  Horton  commands  a  peculiarly  respectful  attention  as  the 
most  learned  and  one  of  the  ablest  champions  of  a  cause  in  favour  of 
which  so  much  ability  and  learning  are  now  enlisted.  The  historical  re- 
search and  the  dialectical  acumen  by  which  he  is  distinguished  are  con- 
spicuously manifested  in  the  work  before  us.  Monetary  history — a  field 
neglected  by  most  economists — has  been  cultivated  by  Mr.  Horton  with  a 
rare  diligence.  His  labours  have  been  rewarded  by  the  discovery  of  hid- 
den treasures. 

****** 

Misinterpreted  history  is  not  the  only  idol  of  the  market-place  which 
Mr.  Horton  undertakes  to  clear  away.  The  prepossession  against  a  fixed 
par  between  silver  and  gold  is  largely  due  to  an  erroneous  theory  con- 
cerning the  relation  of  law  to  the  value  of  money. 

****** 

At  many  other  points  the  bimetallist  leader  attacks  successfully  the 
mono-metallist  intrenchments.  Nor  can  it  reasonably  be  denied  that  he 
has  carried  at  least  the  outworks  of  those  defences — all  the  loose  mass  of 
unfounded  prejudices  by  which  it  has  been  sought  to  bar  even  the  ap- 
proach to  a  consideration  of  the  subject.  It  is  another  question  whether 
he  makes  much  impression  on  the  interior  lines  of  defence  occupied  by 
picked  champions. 

From  the  WESTMINSTER  REVIEW,  September,  1887. 

A  work  of  original  historical  investigation.  Considering  the  dryness  of 
the  subject  to  all  but  experts,  it  is  written  in  a  style  remarkably  inter- 
esting, and  even  picturesque,  as  well  as  vigorous.  Much  historical  infor- 
mation, which  we  believe  to  be  practically  new,  is  brought  to  light.  We 
decline  to  express  any  opinion  as  to  the  bearing  of  this  new  information  on 
the  main  question  ;  but  undoubtedly  it  is  important,  and  must  be  taken 


WESTMINSTER WORLD ATHEN^UM STATIST. 

into  account  by  experts.  *  *  *  As  we  said,  the  work  is  chiefly  historical ; 
but  a  valuable  feature  is  the  author's  examination  of  the  theories  which 
he  detects  underlying  and  controlling  monetary  legislation.  The  lessons 
of  history,  as  the  author  reads  them,  are  clearly  brought  out  and  vigor- 
ously insisted  on. 

From  THE  WOELD  [London  Weekly],  July  13,  1887. 

A  BOOK  WORTH  HEADING. — *  *  *  The  position  is  so  critical  that  we  have 
invariably  made  a  point  of  calling  the  attention  of  our  readers  to  all  pub- 
lications bearing  on  the  question  of  currency,  which  seemed  deserving  of 
special  notice.  We  deem  it,  therefore,  to  be  simply  our  duty  to  briefly 
notice  Mr.  Dana  Horton's  latest  work.  After  all  that  has  been  said  and 
written  on  the  silver  question,  it  might  seem  almost  impossible  to  pro- 
duce a  work  which  takes  fresh  and  novel  departures,  and  approaches  and 
treats  the  subject  in  an  original  and  striking  manner ;  but  in  this  respect 
Mr.  Dana  Horton  has  undoubtedly  and  admirably  succeeded. 

*  *  *  *  *  * 

It  is  positively  refreshing  to  read  this  last  treatise  of  Mr.  Horton,  and 
we  feel  certain  that  no  thoughtful  and  reflecting  mind  can  study  ' '  The 
Silver  Pound"  without  becoming  not  only  himself  convinced  of  the  ab- 
solute correctness  of  the  principles  advocated,  but  without  feeling  him- 
self, as  an  honest  and  useful  man,  called  upon  to  sow  these  principles 
broadcast. 

From  THE  ATHENAEUM  [London  Weekly],  August  20,  1887. 

While,  therefore,  we  share  Prof.  Jevons's  high  opinion  of  Mr.  Horton's 
ability,  and  rank  him  "  quite  apart  from  the  ordinary  bi-metallists,"  we 
do  not  think  that  Mr.  Horton  has  shown  that  Locke's  judgment  on  the 
question  before  us  differs  from  what  we  previously  believed  it  to  be  ;  but 
his  readers  may  heartily  thank  Mr.  Horton  for  the  interesting  and  valua- 
ble historical  investigation  of  which  he  has  given  them  the  benefit. 
From  THE  STATIST  [London  Weekly],  July  30,  1887. 

It  would  be  a  mistake  not  to  recognize  that  the  writer  is  a  student  and 
scholar  of  rare  worth.  He  is  simply  a  gold  mine  of  information  regarding 
monetary  history.  No  matter  what  the  country  is  which  has  had  such  a 
history,  Mr.  Horton  is  at  home  in  that  history,  has  studied  every  mate- 
rial fact  that  can  be  ascertained,  has  dug  up  long-forgotten  documents, 
and  has,  in  fact,  made  it  possible  for  the  present  generation,  to  compre- 
hend past  monetary  arrangements,  and  the  circumstances  in  which  they 
arose,  unlike  as  these  circumstances  may  have  been  to  those  of  the  pres- 
ent time. 

The  present  book  constitutes  a  chapter  of  the  history  which  much  re- 
quires to  be  written. 


MAIL MONEY MORNING    POST COURIER. 

For  students,  also,  Mr.  Horton's  nice  distinctions  of  the  different 
meanings  of  the  word  Standard  itself,  and  of  other  terms  in  monetary 
discussions,  will  be  most  useful.  We  should  have  liked  the  book  better, 
of  course,  if  it  had  not  been  written  from  a  bi-metallist  point  of  view 
(though  Mr.  Horton's  bi-metallism,  be  it  observed,  is  by  no  means  of  the 
Cernuschi  type)  ;  but  this  difference  of  opinion  ought  not  to  prevent  us 
"from  acknowledging  the  really  great  value  of  the  work  to  the  student 
and  the  scholar. 

From  the  DUBLIN  EVENING  MAIL,  August  3,  1887. 

Taken  as  a  good  historic  statement  of  an  intricate  subject,  the  history 
of  our  British  monetary  system  and  its  modifications  up  to  the  present 
time,  we  can  cordially  recommend  this  work. 

MONEY  :    A  JOURNAL  FOR  INVESTORS  AND  SPECULATORS,  AND  REVIEW  OF 
THE  MONEY  MARKET  [London  Weekly^  August  17,  1887. 

It  would  be  difficult  to  conceive  a  more  exhaustive  contribution  to  the 
great  monetary  question  of  the  age  than  this  historical  inquiry — the  out- 
come of  painstaking  researches  by  the  greatest  living  authority  on  the 
subject.  *  *  *  Such  a  work  as  this  is  an  invaluable  aid  to  the  attain- 
ment of  a  right  conception  of  the  pros  and  cons  of  the  question  at  issue. 
It  is  a  masterpiece,  and  will  be  regarded,  not  only  at  the  present  junc- 
ture, but  for  all  time  to  come,  as  a  standard  work  on  our  monetary  policy. 
From  THE  LONDON  MORNING  POST,  August  1,  1887. 

Ample  justification  for  the  prevailing  ignorance  as  to  the  point  of  the 
dispute  that  is  now  raging  in  financial  circles  is  contained  in  the  first 
words  of  Mr.  Horton's  book,  in  which  he  gives  nine  definitions  of 
"  Standard"  (in  the  monetary  sense  of  the  term) — these  being  only 
"  some  of  the  various  meanings  attached  to  the  word." 

From  the  MANCHESTER  COURIER,  July  29,  1887. 

There  is  probably  no  one  on  either  Continent  who  can  speak  with 
greater  authority  on  the  currency  question  than  Mr.  S.  Dana  Horton. 
*  *  *  This  history  -of  English  money  is  of  a  more  exhaustive  and  com- 
plete character  than  any  hitherto  published.  *  *  *  Its  publication 
comes  at  a  most  opportune  moment,  when  the  Koyal  Commission  on 
Gold  and  Silver  is  sitting,  and  when  the  thinking  minds  of  the  country 
are  exercised  to  get  a  solution  of  the  national  monetary  and  commercial 
difficulties  we  are  suffering  from ;  and  Mr.  Horton's  book  clears  away 
much  of  the  obscurity  which  has  hampered  a  clear  understanding  of 
many  important  points,  and  furnishes  a  mass  of  information  which 
demands  the  careful  study  of  all  who  desire  to  be  well  informed  on  the 
subject.  Indeed,  the  appearance  of  this  book  marks  a  new  stage  in  the 
currency  controversy.  Hitherto  the  literature  on  the  subject  has  been 
fragmentary. 


DAILY    TELEGRAPH MANCHESTER   GUARDIAN. 

This  book,  for  the  first  time,  places  the  whole  controversy  before  the 
public  in  a  complete  form,  giving  theory  as  well  as  practice  its  proper 
place. 

From  tlie  London  DAILY  TELEGRAPH,  July  13,  1887. 

There  is  matter  for  some  painful  reflection  just  at  present  in  "The 
Silver  Pound,"  a  sketch  of  England's  monetary  policy  since  the  Restora- 
tion. It  deals  with  the  traditions  and  virtues  of  good  money  at  a  mo- 
ment when  our  Mint  has  put  forth  a  coinage  which,  so  far  as  image  and 
superscription  go,  is  a  disgrace  to  an  artistic  age,  and  a  sorrow  to  numis- 
matists. 

******* 

As  such  the  volume  cannot  hope  to  interest  everyone ;  but  to  the  in- 
itiated, who  appreciate  the  rivalry  of  precious  metals,  and  comprehend 
the  fine  perplexities  of  single  and  double  standards,  dual  money  and  el- 
der systems,  the  author's  researches  must  prove  attractive.  A  History 
of  the  Guinea  follows,  and  concludes  what  bears  all  the  appearance  of 
being  a  careful  and  erudite  treatise  on  these  difficult  and  complex  sub- 
jects. 

/'"rom  THE  MANCHESTER  GUARDIAN,  /September  3,  1887. 

Mr.  Horton  has  brought  to  light  some  most  important  facts  which  will 
undoubtedly  expand  our  views  as  to  the  importance  and  the  true  objects 
of  monetary  legislation. 

In  no  other  direction,  probably,  are  the  teachings  of  history  so  fatally 
neglected  as  in  that  of  monetary  legislation.  The  Act  of  1816,  by  which 
for  the  first  time  in  this  country  or  anywhere  else  gold  alone  was  made 
the  sole  standard  of  value,  seems  to  be  accepted  by  many  as  the  final  ex- 
pression of  the  wisdom  taught  by  all  previous  experience.  It  was,  in 
truth,  a  great  experiment,  the  lessons  of  which  we  are  just  beginning  to 
understand. 

From  THE  MANCHESTER  GUARDIAN,  October  8,  1887. 

That  the  best  book  which  has  appeared  in  our  times  on  English  mone- 
tary history  should  have  been  written  by  an  American  is,  at  first  sight, 
not  creditable  to  English  economists.  But  there  is  a  justifying  explana- 
tion. In  the  United  States  currency  questions  have  for  many  years  been 
"living  issues"  in  consequence  of  the  existence  of  inconvertible  war 
paper  money  from  18G2  to  1878,  and  the  importance  of  arranging  for  the 
return  to  a  specie  basis  after  the  war  was  ended.  The  situation  was,  in 
fact,  not  unlike  that  in  which  our  forefathers  stood  during  and  after  the 
Napoleonic  wars.  It  is  natural,  therefore,  that  the  more  studious  of 
American  writers  upon  the  problems  immediately  before  them  should  have 
turned  their  attention  to  English  experience  for  teaching  and  guidance. 
****** 

To  readers  on  this  side  the  Atlantic  this  work  is  doubly  valuable.     It 


GUARDIAN BEACON CHRONICLE SPECTATOR HERALD. 

appears  at  a  time  when  circumstances  are  rapidly  forcing  into  prominence 
a  currency  problem  in  this  country,  and  it  sets  forth  precisely  the  kind  of 
information  which  is  absolutely  indispensable  to  a  clear  understanding  of 
it,  at  least  on  its  historical  side. 

From  THE  MANCHESTER  GUARDIAN,  October  11,  1887. 
The  whole  book  will  be  read  by  all  who  occupy  their  minds  with  one 
of  the  most  important,  perhaps  the  most  important,    of  the  economic 
questions  of  our  day. 

From  THE  BEACON,  Boston,  Maw.,  Sept.  10,  1887. 

Mr.  Morton's  "  Silver  and  Gold"  was  published  in  187H  by  Robert 
Clarke  &  Co.  at  Cincinnati :  lie  made  weighty  contributions  to  the  Inter- 
national Monetary  Conferences  of  1878  and  1881,  where  he  represented 
the  American  Government  with  consummate  ability,  to  the  confusion  of 
the  European  inono-metallists ;  and  now  he  publishes  "  The  Silver  Pound, 
and  England's  Monetary  Policy  since  the  Restoration,"  together  with  the 
History  of  the  Guinea.  *  *  * 

It  is  extremely  desirable  that  Congress,  the  members  of  the  administra- 
tion, bankers,  politicians,  and  students  should  read  and  master  this  noble 
monograph.  *  *  * 

And  even  a  mono-metallist  will  not  wish  to  take  leave  of  it  without  pay- 
ing a  tribute  of  hearty  admiration  to  the  distinguished  author,  now  un- 
questionably the  greatest  of  "all  American  publicists. 

From  THE  FINANCIAL  AND  COMMERCIAL  CHRONICLE  [New   York   Weekly'], 

October  1,  1887. 

A  very  interesting  volume.  *  *  *  It  may  turn  out  that  Mr.  Horton's 
book  is  timely  in  a  wider  sense  than  at  first  appeared.  In  any  view,  the 
sitting  of  the  Royal  Commission  made  the  moment  of  its  issue  very  op- 
portune. 

From  the  SPECTATOR,  September  1st,  1887. 

Mr.  Dana  Horton,  in  a  very  elaborate  style,  and  with  a  still  more  elab- 
orate array  of  historical  research,  delivers  an  attack  on  the  gold  standard. 

From  THE  GLASGOW  HERALD,  November  3,  1887. 

A  very  important  addition  to  the  literature  of  currency,  and  it  should 
be  carefully  studied  by  all  who  desire  to  understand  that  complicated 
question. 

From  the  SATURDAY  REVIEW  [London  Weekly},  Nov.  19,  1887. 
The  case  is  now  being  argued  as  it  ought  to  be,  and  thoroughly  rea- 
soned out,  and  we  may  hope,  though  scarcely  expect,  that  the  Commission 
will  come,  in  their  Report,  to  a  definite  conclusion.  *  *  *  Mr.  Horton  in- 


SATURDAY    REVIEW GRAPHIC. 

sists  *  *  *  inasmuch  as  gold  was  legally  rated  to  silver  under  the  mon- 
etary administration  of  Locke  and  Newton'  both  metals  were  equally 
money  of  the  country.  Mr.  Horton  says  : — 

Not  only  in  England,  but  generally,  silver  was  the  standard.  Both 
metals  were  money,  but  the  fixed  money,  the  rating  money,  so  to  speak, 
was  silver  ;  the  rated  money  was  gold. 

Sir  Robert  Peel  was,  no  doubt,  misinformed.  *  *  •  *  Mr.  Horton 
enumerates  nine  different  senses  of  the  word  standard.  *  *  *  Ap- 
plying these  definitions  to  Holland  [it  appears  that]  Holland  has,  at  one 
and  the  same  time,  (5)  a  silver  standard,  (6)  a  silver  arid  gold  standard, 
(7)  a  silver  standard,  (8)  a  gold  standard,  (9)  a  limping  standard,  accord- 
ing to  the  sense  in  which  we  use  tin-  word.  No  wonder  that  the  argu- 
ments pro  and  con  in  the  monetary  controversy  fall  often  <}  tort  et  <'/  tra- 
vers,  and  that  the  arguers  are  mostly  at  cross-purposes  with  each  other. 
The  knights  of  the  fable  persist  in  looking  some  at  the  gold,  some  at 
the  silver,  side  of  the  shield.  *  *  *  Mr.  Horton  concludes  that  there 
is  a  monetary  solidarite  between  the  nations,  and  a  necessity  pressing 
upon  each  of  them  to  establish  an  accord  on  the  principles  and  practice 
to  be  followed  ;  and  he  has  much  to  say  on  the  responsibility  of  England 
for  the  present  dislocation,  and  her  paramount  interest  in  leading  the 
way  to  a  reasonable  adjustment.  *  *  *  The  whole  book  is  well  worth 
study,  both  by  those  who  agree  with  Mr.  Horton's  conclusions' and  by 
those  who  dissent  from  them.  Both  classes  of  readers  will  find  much 
that  is  new  to  them,  and  much  matter  for  reflection,  and  the  quotation 
from  Nicholas  Oresme's  tractate  De  mutationibus  monetarum  (1382)  with 
which  he  concludes  may  well  conclude  our  article  : — 

Se  aucum  doncques  pour  amour  de  verite  enquei-re,  vouldroit  contre- 
dire  a  icelles  ou  escripre  contre,  bien  sera,  mais  se  j'ai  mal  parle  porteige 
tesmognage  du  mal  avec  raison,  affin  qu'il  ne  soit  veu  pour  neant  et  de 
sa  singuliere  voulente  temerairement  condemner  ce  que  bonnement  ne  se 
peult  impugner  ne  contredire. 

[If  any  one  for  the  love  of  truth  to  be  sought  out  shall  desire  to  con- 
tradict these  pages  or  to  write  against  them,  it  is  well.  But  if  I  have 
spoken  ill  let  him  bring  evidence  of  the  wrong,  giving  his  reason,  so  that 
it  be  not  seen  that  for  naught  and  out  of  mere  wilfulness  one  rashly  con- 
demns that  which  cannot  rightfully  be  impugned  or  contradicted.] 


From  tJie  London  GEAPHIC,  April  28,  1888. 

The  "Silver  Pound"  is  regarded  as  the  most  authoritative  book  on 
this  subject  ever  written. 


14  DAY  USE 

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